KRS 138.4605 — Taxes on loaner or rental motor vehicles

(1) A motor vehicle dealer who operates a service or repair component in his dealership
may register a motor vehicle to be used exclusively as a loaner or rental motor
vehicle to the customers of this service or repair department. The dealer may pay
usage tax on the loaner or rental motor vehicle as provided in KRS 138.460, or,
subject to the provisions of this section, may pay a usage tax of twenty -five dollars
($25) per month on the loaner or rental motor vehicle.
(2) A dealer shall pay the usage tax on a loa ner or rental motor vehicle in the manner
provided by KRS 138.460 unless the dealer shows to the satisfaction of the
Department of Revenue that he is regularly engaged in the servicing or repair of
motor vehicles and loans or rents the loaner or rental mot or vehicle to a retail
customer while the customer's motor vehicle is at the dealership for repair or
service.
(3) For a dealer to be eligible to pay the usage tax on a loaner or rental motor vehicle
under this section, the dealer shall identify the motor vehicle as a loaner or rental
motor vehicle to the Department of Revenue and shall maintain records, as required
by the Department of Revenue, which show all uses of the loaner or rental motor
vehicle.
(4) The tax due under subsection (1) of this section s hall be remitted to the Department
of Revenue monthly on forms prescribed by and in accordance with administrative
regulations promulgated by the department.
(5) Failure of a motor vehicle dealer to remit the taxes applicable to a loaner or rental
motor ve hicle under this section shall be sufficient cause for the Department of
Revenue to revoke the authority to use that motor vehicle as a loaner or rental motor
vehicle and cause the usage tax on that motor vehicle to be due and payable in
accordance with KRS 138.460 on the retail price of that motor vehicle when it was
first registered as a loaner or rental motor vehicle.
(6) A motor vehicle no longer covered under the loaner permit program shall be taxed
in the same manner as motor vehicles under KRS 138.450(12) or (16).