{"data":{"id":"us-ky/krs-138.463","jurisdiction":"us-ky","citation":"KRS 138.463","heading":"Collection of U-Drive-It tax.  (Effective July 1, 2021)","body":"(1) A  holder of a certificate as required under KRS  281.630 to operate as a\nU-Drive-It as defined in KRS 281.010:\n(a) May  pay the motor vehicle usage tax imposed under KRS  138.460 upon\nthe retail price of the motor vehicle; or\n(b) May  pay the motor vehicle usage tax of six percent (6%) upon the\namount of the gross rental or lease charges paid by a customer or lessee\nrenting or leasing a motor vehicle from such holder of the certificate,\nsubject to the provisions of this section and KRS 138.470.\n(2) The  provisions of KRS  138.462 and this section shall apply to all rental and\nleasehold contracts entered into after March 9, 1990.\n(3) A holder of a certificate shall pay the usage tax as provided in KRS  138.460\nunless he shows to the satisfaction of the cabinet that he is regularly engaged\nin the renting or leasing of motor vehicles to retail customers as a part of an\nestablished business. The  issuance of a U-Drive-It certificate under the\nprovisions of KRS  Chapter 281 shall create a rebuttable presumption that the\nholder of a certificate is regularly engaged in renting or leasing. Persons first\nengaging in the renting or leasing of motor vehicles to retail customers shall, in\naddition to obtaining a certificate required under KRS  281.630, demonstrate to\nthe satisfaction of the cabinet that they are prepared to qualify under the\nstandards set forth in this subsection.\n(4) In the event the holder of such certificate qualifies under subsection (3) of this\nsection and elects to pay the motor vehicle usage tax by the alternate method\nas provided in subsection (1)(b) of this section, or is required by subsection (8)\nof this section to pay by the alternate method, he shall pay the fee imposed by\nKRS  281.631(3) and in addition shall pay the monthly tax authorized by\nsubsection (1) of this section.\n(5) The  tax authorized by subsection (1) of this section shall be the direct\nobligation of the holder of the certificate but it may be charged to and collected\nfrom the customer in addition to the rental or lease charges. The tax due shall\nbe remitted to the cabinet each month on forms and pursuant to regulations\npromulgated by the cabinet.\n(6) (a) As  soon as practicable after each return is received, the cabinet shall\nexamine  and audit it. If the amount of tax computed by the cabinet is\ngreater than the amount returned by the taxpayer, the excess shall be\nassessed by the cabinet within four (4) years from the date the return was\nfiled, except as provided in paragraph (c) of this subsection, and except\nthat in the case of a failure to file a return or of a fraudulent return the\nexcess may be assessed at any time. A notice of such assessment shall\nbe mailed to the taxpayer. The time herein provided may be extended by\nagreement between the taxpayer and the cabinet.\n(b) For the purpose of paragraphs (a) and (c) of this subsection, a return filed\nbefore the last day prescribed by law for the filing thereof shall be\nconsidered as filed on such last day.\n(c) Notwithstanding the four (4) year time limitation of paragraph (a) of this\nsubsection, in the case of a return where the tax computed by the cabinet\nis greater by twenty-five percent (25%) or more than the amount returned\nby the taxpayer, the excess shall be assessed by the cabinet within six (6)\nyears from the date the return was filed.\n(7) Failure of the holder of the certificate to remit the taxes applicable to the rental\ncharges as provided herein shall be sufficient cause for the Department of\nVehicle Regulation to void the certificate issued to such holder and the usage\ntax on each of the motor vehicles which had been registered by the holder\nunder the certificate shall be due and payable on the retail price of each such\nmotor vehicle when it was first purchased by the holder.\n(8) Notwithstanding the provisions of KRS  138.460 and subsection (1) of this\nsection, a holder of a certificate operating a fleet of rental passenger cars\nwhich has been registered pursuant to an allocation formula approved by the\ncabinet shall pay the tax by the method provided in this section. The provisions\nof this section shall apply to all vehicles rented by the holder in this state.\n(9) The  usage tax reported and paid on every rental or lease of a vehicle\nregistered pursuant to this section shall be based on the fair market rental or\nlease value of the vehicle. Fair market rental or lease value shall be based on\nstandards established by administrative regulation promulgated by the cabinet.\nThe  cabinet may  remove a vehicle from the U-Drive-It program without a\nhearing if it is determined by the cabinet that no taxes have been remitted on\nthat vehicle during the registration period. However, the tax reported and paid\nto the Transportation Cabinet shall not be less than the amount due based on\nthe actual terms of a rental or lease agreement. The burden of proving that the\nconsideration charged by the holder satisfies this subsection is on the holder.","path":["KRS Chapter 138"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=51762","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:50:30Z","sha256":"512a42d460f68b14a14157f2049ba852f6428795b49e6e639405bace102c930a","source_id":"us-ky","stale":false,"prev":"us-ky/krs-138.462","next":"us-ky/krs-138.4631"},"notice":"GroundRules: Original legal text. Not legal advice."}