Bill > HB108

This bill addresses ad valorem (property) tax rates for motor vehicles in Kentucky, proposing a gradual reduction of the state property tax rate for vehicles over several years. Specifically, the bill establishes a phased tax rate reduction for motor vehicles assessed under KRS 132.485, starting at 40 cents per $100 of assessed value in 2026 and decreasing annually until reaching 5 cents per $100 in 2033. After January 1, 2034, motor vehicles will be completely exempt from state ad valorem taxes. The bill also retroactively provides a tax exemption for increases in motor vehicle valuations from January 1, 2021, for the 2022 and 2023 assessment dates, with automatic refunds for taxpayers who overpaid. Importantly, this tax reduction applies only to state taxes and does not exempt vehicles from local property taxes or usage taxes. The legislation aims to provide tax relief for vehicle owners by systematically reducing the state property tax rate on motor vehicles over an eight-year period, ultimately eliminating the state-level tax entirely.

Budget and Finance

https://apps.legislature.ky.gov/record/25RS/hb108.html