Usage tax & fees
A motor vehicle usage tax of six percent (6%) is levied upon the “retail price” of vehicles registered for the first time in Kentucky. In the case of new vehicles, the “retail price” is the total consideration given (The consideration is the total of the cash or amount financed and the value of any vehicle traded-in.) or 90% of the manufacturer’s suggested retail price (MSRP), including all additional equipment and destination charges. On any vehicles purchased out of state the “retail price” is based on the total consideration given (the Total Consideration Statement on VTR form must be completed and VTR signed by of state dealer or individual and must be notarized.) or average retail value as listed in NADA (National Auto Dealers Association .) Official Used Car Guide. An out-of-state purchase of a used vehicle now allows for the trade-in credit.
In the case of vehicles brought into Kentucky by new residents, the taxable value is the average trade-in value as listed in the Official Used Car Guide.
If a vehicle is given as a “gift” then the taxable value is the average trade-in value as listed in the Official Used Car Guide.
Note-Penalty provisions for any person who willfully and fraudulently gives a false statement as to total and actual consideration paid for a motor vehicle shall be guilty of a Class D felony and shall be fined not less than $2,000 per offense.
Transfer of a Kentucky Titled Vehicle
A person who purchases a vehicle or brings a vehicle from another state is required to title the vehicle(s) within 15 days. If the owner of a motor vehicle does not reside in Kentucky, the vehicle shall be registered with the County Clerk of the county in which the motor vehicle is principally operated (KRS 186.020).
Currently, there are several types of Kentucky Titles that have been issued. The procedures followed are based on what type of title the seller was issued. Titles issued after February 2000 have the assignment portion and vehicle transaction record form combined on the back of the Certificate of Title. These titles would not require the VTR form # TC96-182 in order to transfer a vehicle.
Titles issued prior to February 2000 only have the assignment portion on the back of the Certificate of Title and would require the VTR form # TC96-182 submitted along with the Title.
The following documents and information are required:
Kentucky Certificate of Title clear of all liens, with assignment portion properly completed by buyer & seller. Depending on what year your title was issued determines the procedure that you follow for a transfer.
A (VTR form # TC-96-182): if title issued before February 2000 must be completed, signed by all registered owners, and notarized. Persons that have power of attorney for the owner(s) may sign, but a copy of the power of attorney must be submitted with the application. If the County Clerk staff notarizes signatures, identification must be presented. Note-Titles that contain AND (instead of OR) between the names of owners require the signature of all owners and/or requires both to sign & notarize.
Buyer Proof of Insurance (in their name) for vehicle purchasing. Title Only transfers may be done if insurance is not available or if the vehicle is inoperable, but the license plate must be surrendered.
Social Security Number for each party appearing on the title or Federal ID Number for companies
Property tax – The owner of a vehicle as of January 1st of each tax year is responsible for the tax for that year. If at the time of transfer, the property tax has not been paid, the seller will be responsible for the tax. To avoid delinquent tax, it is recommended that the seller pay taxes at the time of transfer. If not, the seller will be sent a notification by the Kentucky Revenue Cabinet of the tax due.
Usage Tax – A six percent (6%) motor vehicle usage tax is levied upon the “retail price” of vehicles transferred in Kentucky. On used vehicles, the usage tax is 6% of the current average retail as listed in the Used Car Guide or 6% of the total consideration paid. On used vehicles, the total consideration paid is the total given less any trade-in allowance, if applicable. Trade-in allowance applies to used vehicles only and the vehicle being traded must be previously registered in Kentucky.
Usage Tax Exemptions are on the following types of Kentucky transfers:
- Charitable/Education Organization
- Corporation/Subsidiary (LLC)*
- Dealer Registration
- Military Exempt*
- State Government
- US Government
- Corporation/Proprietorship (LLC)*
- Court Order/Will*
- Local Government
- Name Change
* Documentation must be provided
Kentucky Title Fee $9.00
Notary Fee: $2.00
The title is mailed to the owner by the Kentucky Transportation Cabinet, Title Branch, Frankfort, KY 40601. Expect the title in about 4-6 weeks.
Kentucky Speed Title $25.00
A speed title is mailed to the owner the following business day by the Kentucky Transportation Cabinet, Title Branch, Frankfort, KY 40601.
Transfer Fee $9.00.
The yearly registration fee is $21.00.
Usage Tax- 6% of “retail price”: See Usage Tax.
Title Lien Statement recording fee- $22.00