AN ACT relating to motor vehicle usage tax.

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