KRS 138.460 — Motor vehicle usage tax -- Imposition -- Rate -- Collection -- Refunds

(1) A tax levied upon its retail price at the rate of six percent (6%) shall be paid on the
use in this state of every motor vehicle, except those exempted by KRS 138.470, at
the time and in the manner provided in this section.
(2) The tax shall be collected by the county clerk or other officer with whom the
vehicle is required to be titled or registered:
(a) When the fee for titling or registering a motor vehicle the first time it is
offered for titling or registration in this state is collected; or
(b) Upon the transfer of title or registration of any motor vehicle previously titled
or registered in this state.
(3) The tax imposed by subsection (1) of this section and collected under subsection (2)
of this section shall not be collected if the owner provides to the county clerk a
signed affidavit of nonhighway use, on a form provided by the department, attesting
that the vehicle will not be used on the highways of the Commonwealth. If this type
of affidavit is provided, the clerk shall, in accordance with the provisions of KRS
Chapter 139, immediately collect the applicable sales and use tax due on the
vehicle.
(4) (a) The tax collected by the county clerk under this section shall be r eported and
remitted to the department on forms prescribed and provided by the
department. The department shall provide each county clerk affidavit forms
which the clerk shall provide to the public free of charge to carry out the
provisions of KRS 138.450 and subsection (3) of this section. The county
clerk shall for his services in collecting the tax be entitled to retain an amount
equal to three percent (3%) of the tax collected and accounted for.
(b) The sales and use tax collected by the county clerk un der subsection (3) of
this section shall be reported and remitted to the department on forms which
the department shall prescribe and provide at no cost. The county clerk shall,
for his or her services in collecting the tax, be entitled to retain an amount
equal to three percent (3%) of the tax collected and accounted for.
(c) Motor vehicle dealers licensed pursuant to KRS Chapter 190 shall not owe or
be responsible for the collection of sales and use tax due under subsection (3)
of this section.
(5) A county clerk or other officer shall not title, register or issue any license tags to the
owner of any motor vehicle subject to the tax imposed by subsection (1) of this
section or the tax imposed by KRS Chapter 139, when the vehicle is being offered
for titling or registration for the first time, or transfer the title of any motor vehicle
previously registered in this state, unless the owner or his agent pays the tax levied
under subsection (1) of this section or the tax imposed by KRS Chapter 139, if
applicable, in addition to any title, registration, or license fees.
(6) (a) When a person offers a motor vehicle:
1. For titling on or after July 1, 2005; or
2. For registration;
for the first time in this state which was registered in another state that le vied
a tax substantially identical to the tax levied under this section, the person
shall be entitled to receive a credit against the tax imposed by this section
equal to the amount of tax paid to the other state. A credit shall not be given
under this subsection for taxes paid in another state if that state does not grant
similar credit for substantially identical taxes paid in this state.
(b) When a resident of this state offers a motor vehicle for registration for the first
time in this state:
1. Upon wh ich the Kentucky sales and use tax was paid by the resident
offering the motor vehicle for registration at the time of titling under
subsection (3) of this section; and
2. For which the resident provides proof that the tax was paid;
a nonrefundable credit shall be given against the tax imposed by subsection
(1) of this section for the sales and use tax paid.
(7) (a) A county clerk or other officer shall not title, register, or issue any license tags
to the owner of any motor vehicle subject to this tax, wh en the vehicle is then
being offered for titling or registration for the first time, unless the seller or
his agent delivers to the county clerk a notarized affidavit, if required, and
available under KRS 138.450 attesting to the total and actual considera tion
paid or to be paid for the motor vehicle.
(b) If a notarized affidavit is not available, the clerk shall follow the procedures
under KRS 138.450(12) for new vehicles, and KRS 138.450(14) or (15) for
used vehicles.
(c) The clerk shall attach the notari zed affidavit, if available, or other
documentation attesting to the retail price of the vehicle as the department
may prescribe by administrative regulation promulgated under KRS Chapter
13A to the copy of the certificate of registration and application f or title
mailed to the department.
(8) Notwithstanding the provisions of KRS 138.450, the tax shall not be less than six
dollars ($6) upon titling or first registration of a motor vehicle in this state, except
where the vehicle is exempt from tax under KRS 138.470 or 154.45-090.
(9) Where a motor vehicle is sold by a dealer and the purchaser returns the vehicle for
any reason to the same dealer within sixty (60) days for a vehicle replacement or a
refund of the purchase price, the purchaser shall be entitle d to a refund of the
amount of usage tax received by the department as a result of the registration of the
returned vehicle. In the case of a new motor vehicle, the registration of the returned
vehicle shall be canceled and the vehicle shall be considered to have not been
previously registered in Kentucky when resold by the dealer.
(10) When a manufacturer refunds the retail purchase price or replaces a new motor
vehicle for the original purchaser within ninety (90) days because of malfunction or
defect, the purchaser shall be entitled to a refund of the amount of motor vehicle
usage tax received by the department as a result of the first titling or registration. A
person shall not be entitled to a refund unless the person has filed with the
department a report from the manufacturer identifying the vehicle that was replaced
and stating the date of replacement.
(11) Notwithstanding the time limitations of subsections (9) and (10) of this section,
when a dealer or manufacturer refunds the retail purchase price or replaces a motor
vehicle for the purchaser as a result of formal arbitration or litigation, or, in the case
of a manufacturer, because ordered to do so by a dispute resolution system
established under KRS 367.865 or 16 C.F.R. 703, the purchaser shall be entitled to
a refund of the amount of motor vehicle usage tax received by the department as a
result of the titling or registration. A person shall not be entitled to a refund unless
the person files with the department a report from the dealer or manufac turer
identifying the vehicle that was replaced.
(12) (a) An owner who has paid the tax levied under this section on a used motor
vehicle or U -Drive-It vehicle based upon the retail price as defined in KRS
138.450(16)(a) shall be entitled to a refund of an y tax overpayment, plus
applicable interest as provided in KRS 131.183, if the owner:
1. Files for a refund with the department within four (4) years from the
date the tax was paid as provided in KRS 134.580; and
2. Documents to the satisfaction of the department that the condition of the
vehicle merits a retail price lower than the retail price as defined in KRS
138.450(16)(a).
(b) The department shall promulgate administrative regulations to develop the
forms and the procedures by which the owner can appl y for a refund and
document the condition of the vehicle. The department shall provide the
information to each county clerk.
(c) The refund shall be based upon the difference between the tax paid and the tax
determined to be due by the department at the ti me the owner titled or
registered the vehicle.