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AN ACT relating to property taxation. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
Section 1. KRS 132.020 is amended to read as follows: 3
(1) The owner or person assessed shall pay an annual ad valorem tax for state purposes 4
at the rate of: 5
(a) Thirty-one and one-half cents ($0.315) upon each one hundred dollars ($100) 6
of value of all real property directed to be assessed for taxation; 7
(b) Twenty-five cents ($0.25) upon each one hundred dollars ($100) of value of 8
all motor vehicles qualifying for permanent registration as historic motor 9
vehicles under KRS 186.043; 10
(c) Fifteen cents ($0.15) upon each one hundred dollars ($100) of value of all: 11
1. Machinery actually engaged in manufacturing; 12
2. Commercial radio and television equipment used to receive, capture, 13
produce, edit, enhance, modify, process, store, convey, or transmit audio 14
or video content or electronic signals which are broadcast over the air to 15
an antenna, including radio and television towers used to transmit or 16
facilitate the transmission of the signal broadcast and equipment used to 17
gather or transmit weather information, but excluding telephone and 18
cellular communication towers; and 19
3. Tangible personal property which has been certified as a pollution 20
control facility as defined in KRS 224.1-300. In the case of tangible 21
personal property certified as a pollution control facility which is 22
incorporated into a landfill facility, the tangible personal property shall 23
be presumed to remain tangible personal property for purposes of this 24
paragraph if the tangible personal property is being used for its intended 25
purposes; 26
(d) Ten cents ($0.10) upon each one hundred dollars ($100) of value on the 27 UNOFFICIAL COPY 22 RS BR 1283
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operating property of railroads or railway companies that operate solely within 1
the Commonwealth; 2
(e) Five cents ($0.05) upon each one hundred dollars ($100) of value of goods 3
held for sale in the regular course of business, which includes: 4
1. Machinery and equipment held in a retailer's inventory for sale or lease 5
originating under a floor plan financing arrangement; 6
2. Motor vehicles: 7
a. Held for sale in the inventory of a licensed motor vehicle dealer, 8
including licensed motor vehicle auction dealers, which are not 9
currently titled and registered in Kentucky and are held on an 10
assignment pursuant to KRS 186A.230; or 11
b. That are in the possession of a licensed motor vehicle dealer, 12
including licensed motor vehicle auction dealers, for sale, although 13
ownership has not been transferred to the dealer; 14
3. Raw materials, which includes distilled spirits and distilled spirits 15
inventory; 16
4. In-process materials, which includes distilled spirits and distilled spirits 17
inventory, held for incorporation in finished goods held for sale in the 18
regular course of business; and 19
5. Qualified heavy equipment; 20
(f) One and one-half cents ($0.015) upon each one hundred dollars ($100) of 21
value of all: 22
1. Privately owned leasehold interests in industrial buildings, as defined 23
under KRS 103.200, owned and financed by a tax-exempt governmental 24
unit, or tax-exempt statutory authority under the provisions of KRS 25
Chapter 103, upon the prior approval of the Kentucky Economic 26
Development Finance Authority, except that the rate shall not apply to 27 UNOFFICIAL COPY 22 RS BR 1283
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the proportion of value of the leasehold interest created through any 1
private financing; 2
2. Qualifying voluntary environmental remediation property, provided the 3
property owner has corrected the effect of all known releases of 4
hazardous substances, pollutants, contaminants, petroleum, or petroleum 5
products located on the property consistent with a corrective action plan 6
approved by the Energy and Environment Cabinet pursuant to KRS 7
224.1-400, 224.1-405, or 224.60-135, and provided the cleanup was not 8
financed through a public grant or the petroleum storage tank 9
environmental assurance fund. This rate shall apply for a period of three 10
(3) years following the Energy and Environment Cabinet's issuance of a 11
No Further Action Letter or its equivalent, after which the regular tax 12
rate shall apply; 13
3. Tobacco directed to be assessed for taxation; 14
4. Unmanufactured agricultural products; 15
5.[ Aircraft not used in the business of transporting persons or property for 16
compensation or hire; 17
6.] Federally documented vessels not used in the business of transporting 18
persons or property for compensation or hire, or for other commercial 19
purposes; and 20
6.[7.] Privately owned leasehold interests in residential property described in 21
KRS 132.195(2)(g); 22
(g) One-tenth of one cent ($0.001) upon each one hundred dollars ($100) of value 23
of all: 24
1. Farm implements and farm machinery owned by or leased to a person 25
actually engaged in farming and used in his farm operations; 26
2. Livestock and domestic fowl; 27 UNOFFICIAL COPY 22 RS BR 1283
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3. Tangible personal property located in a foreign trade zone established 1
pursuant to 19 U.S.C. sec. 81, provided that the zone is activated in 2
accordance with the regulations of the United States Customs Service 3
and the Foreign Trade Zones Board; and 4
4. Property which has been certified as an alcohol production facility as 5
defined in KRS 247.910, or as a fluidized bed energy production facility 6
as defined in KRS 211.390; and 7
(h) Forty-five cents ($0.45) upon each one hundred dollars ($100) of value of all 8
other property directed to be assessed for taxation shall be paid by the owner 9
or person assessed, except as provided in KRS 132.030, 132.200, 136.300, 10
and 136.320, providing a different tax rate for particular property. 11
(2) Notwithstanding subsection (1)(a) of this section, the state tax rate on real property 12
shall be reduced to compensate for any increase in the aggregate assessed value of 13
real property to the extent that the increase exceeds the preceding year's assessment 14
by more than four percent (4%), excluding: 15
(a) The assessment of new property as defined in KRS 132.010(8); 16
(b) The assessment from property which is subject to tax increment financing 17
pursuant to KRS Chapter 65; and 18
(c) The assessment from leasehold property which is owned and financed by a 19
tax-exempt governmental unit, or tax-exempt statutory authority under the 20
provisions of KRS Chapter 103 and entitled to the reduced rate of one and 21
one-half cents ($0.015) pursuant to subsection (1)(f) of this section. In any 22
year in which the aggregate assessed value of real property is less than the 23
preceding year, the state rate shall be increased to the extent necessary to 24
produce the approximate amount of revenue that was produced in the 25
preceding year from real property. 26
(3) By July 1 each year, the department shall compute the state tax rate applicable to 27 UNOFFICIAL COPY 22 RS BR 1283
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real property for the current year in accordance with the provisions of subsection (2) 1
of this section and certify the rate to the county clerks for their use in preparing the 2
tax bills. If the assessments for all counties have not been certified by July 1, the 3
department shall, when either real property assessments of at least seventy-five 4
percent (75%) of the total number of counties of the Commonwealth have been 5
determined to be acceptable by the department, or when the number of counties 6
having at least seventy-five percent (75%) of the total real property assessment for 7
the previous year have been determined to be acceptable by the department, make 8
an estimate of the real property assessments of the uncertified counties and compute 9
the state tax rate. 10
(4) If the tax rate set by the department as provided in subsection (2) of this section 11
produces more than a four percent (4%) increase in real property tax revenues, 12
excluding: 13
(a) The revenue resulting from new property as defined in KRS 132.010(8); 14
(b) The revenue from property which is subject to tax increment financing 15
pursuant to KRS Chapter 65; and 16
(c) The revenue from leasehold property which is owned and financed by a tax-17
exempt governmental unit, or tax-exempt statutory authority under the 18
provisions of KRS Chapter 103 and entitled to the reduced rate of one and 19
one-half cents ($0.015) pursuant to subsection (1) of this section; 20
the rate shall be adjusted in the succeeding year so that the cumulative total of each 21
year's property tax revenue increase shall not exceed four percent (4%) per year. 22
(5) The provisions of subsection (2) of this section notwithstanding, the assessed value 23
of unmined coal certified by the department after July 1, 1994, shall not be included 24
with the assessed value of other real property in determining the state real property 25
tax rate. All omitted unmined coal assessments made after July 1, 1994, shall also 26
be excluded from the provisions of subsection (2) of this section. The calculated 27 UNOFFICIAL COPY 22 RS BR 1283
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rate shall, however, be applied to unmined coal property, and the state revenue shall 1
be devoted to the program described in KRS 146.550 to 146.570, except that four 2
hundred thousand dollars ($400,000) of the state revenue shall be paid annually to 3
the State Treasury and credited to the Office of Energy Policy for the purpose of 4
public education of coal-related issues. 5
Section 2. KRS 132.200 is amended to read as follows: 6
All property subject to taxation for state purposes shall also be subject to taxation in the 7
county, city, school, or other taxing district in which it has a taxable situs, except the class 8
of property described in KRS 132.030 and the following classes of property, which shall 9
be subject to taxation for state purposes only: 10
(1) Farm implements and farm machinery owned by or leased to a person actually 11
engaged in farming and used in his farm operation; 12
(2) Livestock, ratite birds, and domestic fowl; 13
(3) Capital stock of savings and loan associations; 14
(4) Machinery actually engaged in manufacturing, products in the course of 15
manufacture, and raw material actually on hand at the plant for the purpose of 16
manufacture. The printing, publication, and distribution of a newspaper or operating 17
a job printing plant shall be deemed to be manufacturing; 18
(5) (a) Commercial radio and television equipment used to receive, capture, produce, 19
edit, enhance, modify, process, store, convey, or transmit audio or video 20
content or electronic signals which are broadcast over the air to an antenna; 21
(b) Equipment directly used or associated with the equipment identified in 22
paragraph (a) of this subsection, including radio and television towers used to 23
transmit or facilitate the transmission of the signal broadcast, but excluding 24
telephone and cellular communications towers; and 25
(c) Equipment used to gather or transmit weather information; 26
(6) Unmanufactured agricultural products. They shall be exempt from taxation for state 27 UNOFFICIAL COPY 22 RS BR 1283
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purposes to the extent of the value, or amount, of any unpaid nonrecourse loans 1
thereon granted by the United States government or any agency thereof, and except 2
that cities and counties may each impose an ad valorem tax of not exceeding one 3
and one-half cents ($0.015) on each one hundred dollars ($100) of the fair cash 4
value of all unmanufactured tobacco and not exceeding four and one-half cents 5
($0.045) on each one hundred dollars ($100) of the fair cash value of all other 6
unmanufactured agricultural products, subject to taxation within their limits that are 7
not actually on hand at the plants of manufacturing concerns for the purpose of 8
manufacture, nor in the hands of the producer or any agent of the producer to whom 9
the products have been conveyed or assigned for the purpose of sale; 10
(7) All privately owned leasehold interest in industrial buildings, as defined under KRS 11
103.200, owned and financed by a tax-exempt governmental unit, or tax-exempt 12
statutory authority under the provisions of KRS Chapter 103, except that the rate 13
shall not apply to the proportion of value of the leasehold interest created through 14
any private financing; 15
(8) Tangible personal property which has been certified as a pollution control facility as 16
defined in KRS 224.1-300. In the case of tangible personal property certified as a 17
pollution control facility which is incorporated into a landfill facility, the tangible 18
personal property shall be presumed to remain tangible personal property for 19
purposes of this subsection if the tangible personal property is being used for its 20
intended purposes; 21
(9) Property which has been certified as an alcohol production facility as defined in 22
KRS 247.910; 23
(10) On and after January 1, 1977, the assessed value of unmined coal shall be included 24
in the formula contained in KRS 132.590(9) in determining the amount of county 25
appropriation to the office of the property valuation administrator; 26
(11) Tangible personal property located in a foreign trade zone established pursuant to 27 UNOFFICIAL COPY 22 RS BR 1283
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19 U.S.C. sec. 81, provided that the zone is activated in accordance with the 1
regulations of the United States Customs Service and the Foreign Trade Zones 2
Board; 3
(12) Motor vehicles qualifying for permanent registration as historic motor vehicles 4
under the provisions of KRS 186.043. However, nothing herein shall be construed 5
to exempt historical motor vehicles from the usage tax imposed by KRS 138.460; 6
(13) Property which has been certified as a fluidized bed energy production facility as 7
defined in KRS 211.390; 8
(14) All motor vehicles: 9
(a) Held for sale in the inventory of a licensed motor vehicle dealer, including 10
motor vehicle auction dealers, which are not currently titled and registered in 11
Kentucky and are held on an assignment pursuant to the provisions of KRS 12
186A.230; 13
(b) That are in the possession of a licensed motor vehicle dealer, including 14
licensed motor vehicle auction dealers, for sale, although ownership has not 15
been transferred to the dealer; and 16
(c) With a salvage title held by an insurance company; 17
(15) Machinery or equipment owned by a business, industry, or organization in order to 18
collect, source separate, compress, bale, shred, or otherwise handle waste materials 19
if the machinery or equipment is primarily used for recycling purposes as defined in 20
KRS 139.010; 21
(16) New farm machinery and other equipment held in the retailer's inventory for sale 22
under a floor plan financing arrangement by a retailer, as defined under KRS 23
365.800; 24
(17) New boats and new marine equipment held for retail sale under a floor plan 25
financing arrangement by a dealer registered under KRS 235.220; 26
(18)[ Aircraft not used in the business of transporting persons or property for 27 UNOFFICIAL COPY 22 RS BR 1283
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compensation or hire if an exemption is approved by the county, city, school, or 1
other taxing district in which the aircraft has its taxable situs; 2
(19)] Federally documented vessels not used in the business of transporting persons or 3
property for compensation or hire or for other commercial purposes, if an 4
exemption is approved by the county, city, school, or other taxing district in which 5
the federally documented vessel has its taxable situs; 6
(19)[(20)] Any nonferrous metal that conforms to the quality, shape, and weight 7
specifications set by the New York Mercantile Exchange's special contract rules for 8
metals, and which is located or stored in a commodity warehouse and held on 9
warrant, or for which a written request has been made to a commodity warehouse to 10
place it on warrant, according to the rules and regulations of a trading facility. In 11
this subsection: 12
(a) "Commodity warehouse" means a warehouse, shipping plant, depository, or 13
other facility that has been designated or approved by a trading facility as a 14
regular delivery point for a commodity on contracts of sale for future delivery; 15
and 16
(b) "Trading facility" means a facility that is designated by or registered with the 17
federal Commodity Futures Trading Commission under 7 U.S.C. secs. 1 et 18
seq. "Trading facility" includes the Board of Trade of the City of Chicago, the 19
Chicago Mercantile Exchange, and the New York Mercantile Exchange; 20
(20)[(21)] Qualifying voluntary environmental remediation property for a period of three 21
(3) years following the Energy and Environment Cabinet's issuance of a No Further 22
Action Letter or its equivalent, pursuant to the correction of the effect of all known 23
releases of hazardous substances, pollutants, contaminants, petroleum, or petroleum 24
products located on the property consistent with a corrective action plan approved 25
by the Energy and Environment Cabinet pursuant to KRS 224.1-400, 224.1-405, or 26
224.60-135, and provided the cleanup was not financed through a public grant 27 UNOFFICIAL COPY 22 RS BR 1283
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program of the petroleum storage tank environmental assurance fund; 1
(21)[(22)] Biotechnology products held in a warehouse for distribution by the 2
manufacturer or by an affiliate of the manufacturer. For the purposes of this section: 3
(a) "Biotechnology products" means those products that are applicable to the 4
prevention, treatment, or cure of a disease or condition of human beings and 5
that are produced using living organisms, materials derived from living 6
organisms, or cellular, subcellular, or molecular components of living 7
organisms. Biotechnology products does not include pharmaceutical products 8
which are produced from chemical compounds; 9
(b) "Warehouse" includes any establishment that is designed to house or store 10
biotechnology products, but does not include blood banks, plasma centers, or 11
other similar establishments; 12
(c) "Affiliate" means an individual, partnership, or corporation that directly or 13
indirectly owns or controls, or is owned or controlled by, or is under common 14
ownership or control with, another individual, partnership, or corporation; 15
(22)[(23)] Recreational vehicles held for sale in a retailer's inventory; and 16
(23)[(24)] A privately owned leasehold interest in residential property described in KRS 17
132.195(2)(g), if an exemption is approved by the county, city, school, or other 18
taxing district in which the residential property is located. 19
SECTION 3. A NEW SECTION OF KRS CHAPTER 132 IS CREATED TO 20
READ AS FOLLOWS: 21
For assessment dates beginning on or after January 1, 2023, aircraft not used in the 22
business of transporting persons or property for compensation or hire shall be exempt 23
from state and local ad valorem taxes, including the county, city, school, or other 24
taxing district in which it has a taxable situs. 25
Section 4. This Act applies to property assessed on or after January 1, 2023. 26