FRANKFORT, Ky. — Members of the House Appropriations and Revenue Committee voted unanimously to approve legislation sponsored by Representative Sal Santoro that would offer relief from skyrocketing motor vehicle tax rates in Kentucky. The measure, HB 6, would require Property Value Assessors (PVAs) under the Kentucky Department of Revenue to use the average trade-in value to assess motor vehicles for tax purposes, instead of a higher “clean” trade-in value rate currently in use.
“When we’re talking about a standard rate, that rate should reflect the average vehicle value across the board,” Santoro said. “The reality is the majority of vehicle owners are paying rates that are much higher than their vehicle is actually worth as a result of the current standard of clean trade-in.”
Existing Kentucky law requires that motor vehicles be taxed according to a standard value, which the statute defines as the “average trade-in value.” However, in 2009 under Governor Steve Beshear, the Department of Revenue adopted a policy defining “average trade-in” to mean a higher valuation of “clean trade-in.” HB 6 would require the average trade-in value to be used at the standard beginning in January of 2023.
“Current law already has it that average trade-in should be the standard,” Santoro said. “The executive branch made a decision of their own volition to begin using the higher clean trade-in rate back in 2009. This bill would simply ensure that the standard required by law is followed going forward.”
According to a memorandum published by the Office of Property Valuation, 2022 motor vehicle valuation has increased an unprecedented 40 percent compared to 2021. HB 6 would apply retroactively to January 1, 2022, exempting the portion of motor vehicle tax calculated based on this increased rate and requiring refunds to be issued to those who have paid these rates.
“This has been a top priority issue this session,” Santoro added. “I look forward to getting this measure passed and getting Kentuckians the relief they need.”
Primary co-sponsor Representative Patrick Flannery was the bill’s original sponsor when it was filed earlier this session. “I modeled this legislation after one of the first bills I ever filed as a legislator. I saw a need from my constituents to correct this issue then, during the 2021 session, but the issue has been even more inflated by the 40% tax hike. I am proud to co-sponsor this important and long overdue measure along with Rep. Santoro.”
HB 6 moves to the House floor for consideration. For more information on the measure, visit legislature.ky.gov or click here.
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