UNOFFICIAL COPY 25 RS BR 56
Page 1 of 4
XXXX 10/24/2024 11:59 AM Jacketed
AN ACT relating to motor vehicle usage tax. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
ď˘Section 1. KRS 138.470 is amended to read as follows: 3
There is expressly exempted from the tax imposed by KRS 138.460: 4
(1) (a) Motor vehicles titled or registered to the United States, or to the 5
Commonwealth of Kentucky or any of its political subdivisions; and 6
(b) The gross rental or lease charges for the rental or lease of a motor vehicle paid 7
by the United States, or the Commonwealth of Kentucky or any of its political 8
subdivisions; 9
(2) Motor vehicles titled or registered to institutions of purely public charity and 10
institutions of education not used or employed for gain by any person or 11
corporation; 12
(3) Motor vehicles which have been previously titled in Kentucky on or after July 1, 13
2005, or previously registered and titled in any state or by the federal government 14
when being sold or transferred to licensed motor vehicle dealers for resale. The 15
motor vehicles shall not be leased, rented, or loaned to any person and shall be held 16
for resale only; 17
(4) Motor vehicles sold by or transferred from dealers registered and licensed in 18
compliance with the provisions of KRS 186.070 and KRS 190.010 to 190.080 to 19
members of the Armed Forces on duty in this Commonwealth under orders from 20
the United States government; 21
(5) Commercial motor vehicles, excluding passenger vehicles having a seating capacity 22
for nine (9) persons or less, owned by nonresident owners and used primarily in 23
interstate commerce and based in a state other than Kentucky which are required to 24
be registered in Kentucky by reason of operational requirements or fleet proration 25
agreements and are registered pursuant to KRS 186.145; 26
(6) Motor vehicles titled in Kentucky on or after July 1, 2005, or previously registered 27 UNOFFICIAL COPY 25 RS BR 56
Page 2 of 4
XXXX 10/24/2024 11:59 AM Jacketed
in Kentucky, transferred between husband and wife, parent and child, stepparent 1
and stepchild, or grandparent and grandchild; 2
(7) Motor vehicles transferred when a business changes its name and no other 3
transaction has taken place or an individual changes his or her name; 4
(8) Motor vehicles transferred to a corporation from a proprietorship or limited liability 5
company, to a limited liability company from a corporation or proprietorship, or 6
from a corporation or limited liability company to a proprietorship, within six (6) 7
months from the time that the business is incorporated, organized, or dissolved, if 8
the transferor and the transferee are the same business entity except for a change in 9
legal form; 10
(9) Motor vehicles transferred by will, court order, or under the statutes covering 11
descent and distribution of property, if the vehicles were titled in Kentucky on or 12
after July 1, 2005, or previously registered in Kentucky; 13
(10) Motor vehicles transferred between a subsidiary corporation and its parent 14
corporation if there is no consideration, or nominal consideration, or in sole 15
consideration of the cancellation or surrender of stock; 16
(11) Motor vehicles transferred between a limited liability company and any of its 17
members, if there is no consideration, or nominal consideration, or in sole 18
consideration of the cancellation or surrender of stock; 19
(12) The interest of a partner in a motor vehicle when other interests are transferred to 20
him or her; 21
(13) Motor vehicles repossessed by a secured party who has a security interest in effect 22
at the time of repossession and a repossession affidavit as required by KRS 23
186.045(6). The repossessor shall hold the vehicle for resale only and not for 24
personal use, unless he or she has previously paid the motor vehicle usage tax on 25
the vehicle; 26
(14) Motor vehicles transferred to an insurance company to settle a claim. These 27 UNOFFICIAL COPY 25 RS BR 56
Page 3 of 4
XXXX 10/24/2024 11:59 AM Jacketed
vehicles shall be junked or held for resale only; 1
(15) Motor carriers operating under a charter bus certificate issued by the Transportation 2
Cabinet under KRS Chapter 281; 3
(16) (a) 1. Motor vehicles registered under KRS 186.050 that have a declared gross 4
vehicle weight with any towed unit of forty-four thousand and one 5
(44,001) pounds or greater; and 6
2. Farm trucks registered under KRS 186.050(4) that have a declared gross 7
vehicle weight with any towed unit of forty-four thousand and one 8
(44,001) pounds or greater. 9
(b) To be eligible for the exemption established in paragraph (a) of this 10
subsection, motor vehicles shall be registered at the appropriate range for the 11
declared gross weight of the vehicle established in KRS 186.050(3)(b) and 12
shall be prohibited from registering at a higher weight range. If a motor 13
vehicle is initially registered in one (1) declared gross weight range and 14
subsequently is registered at a declared gross weight range lower than forty-15
four thousand and one (44,001) pounds, the person registering the vehicle 16
shall be required to pay the county clerk the usage tax due on the vehicle 17
unless the person can provide written proof to the clerk that the tax has been 18
previously paid; 19
(17) Motor vehicles transferred to a trustee to be held in trust, or from a trustee to a 20
beneficiary of the trust, if a direct transfer from the grantor of the trust to all 21
individual beneficiaries of the trust would have qualified for an exemption from the 22
tax pursuant to subsection (6) or (9) of this section; 23
(18) Motor vehicles transferred to a trustee to be held in trust, if the grantor of the trust is 24
a natural person and is treated as the owner of any portion of the trust for federal 25
income tax purposes under the provisions of 26 U.S.C. secs. 671 to 679; 26
(19) Motor vehicles transferred from a trustee of a trust to another person if: 27 UNOFFICIAL COPY 25 RS BR 56
Page 4 of 4
XXXX 10/24/2024 11:59 AM Jacketed
(a) The grantor of the trust is a natural person and is treated as the owner of any 1
portion of the trust for federal income tax purposes under the provisions of 26 2
U.S.C. secs. 671 to 679; and 3
(b) A direct transfer from the grantor of the trust to the person would have 4
qualified for an exemption from the tax pursuant to subsection (6) or (9) of 5
this section;[ and] 6
(20) Motor vehicles previously registered in another state, and owned by a current or 7
former member of the Armed Forces of the United States, provided that the motor 8
vehicle was purchased when the owner was on active duty; and 9
(21) Motor vehicles under a manufacturer's statement of origin in possession of a 10
licensed new motor vehicle dealer that are titled and transferred to a licensed used 11
motor vehicle dealer and held for sale. 12