Wednesday, 12 January 2022 14:03

Kentucky Lawmakers Seek to Fix Skyrocketing Motor Vehicle Property Tax Quandary

Written by Steve Bittenbender, The Center Square


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Kentucky lawmakers are working on an immediate fix to the state’s motor vehicle property tax, which is expected to rise substantially this year.

The rise is not due to an increase in the rate. Instead, it will come from much higher valuations on vehicles, with the 2022 valuations expected to be around 40% higher than they were in 2021. 


The Hopkins County Clerk’s Office posted on its Facebook page a Jan. 6 letter it received from the state Department of Revenue advising county clerks, who are responsible for collecting the tax, of the increase. The letter from Director of State Valuation Cathy Thompson called the increases an “unprecedented” event.


The higher assessments were due to multiple factors, including reduced production of new cars, the lack of used cars available in the market and increased interest in used cars by dealers.


State Rep. Patrick Flannery, R-Olive Hill, said he anticipated this happening and filed a bill in the 2021 session to stop it. That bill never received a vote in a committee. 


He filed House Bill 6 on Jan. 10, which he said would address a “dirty secret” in how the state has assessed vehicles for more than a decade. 


The state constitution calls for all property to be assessed at “fair cash value, estimated at the price it would bring at a fair voluntary sale.” Flannery said the Department of Revenue in 2009 under then-Gov. Steve Beshear revised state policy to determine a vehicle’s value based on a “clean trade-in.”


According to NADAGuides.com, a “clean trade-in” means the assessed car or truck “passes all necessary inspections with ease” and has no mechanical defects with minimal wear and tear.


That determination “means...

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