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Kentucky ad valorem tax

Discussion in 'North Central - USA (MI, IN, OH, KY, WV)' started by Cincy Ken, Oct 16, 2007.

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  1. Cincy Ken

    Cincy Ken Karting

    Jan 24, 2004
    219
    Cincinnati
    #1 Cincy Ken, Oct 16, 2007
    If I understand this correctly, Kentucky has a 6% "ad valorem" tax, which is essentially a use tax exacted on cars that are registered for the first time in the state. Residents buying new cars apparently get credited for this by paying the sales tax at the time of purchase. But new residents who bring cars with them must pay this tax the first time the car is registered, despite having previously paid sales tax in another state when the car was purchased.

    I'm curious about any legal ways to avoid or reduce the impact of this tax. Is there a benefit to a car being a "collector" car, and, if so, what does it take to qualify? I've also heard the suggestion that the car be registered to a non-Kentucky business, but that may not be practical for the average enthusiast.

    Any ideas? I figure there are a lot of Kentucky owners who've already thought this through. Thanks for your thoughts.
     
  2. Gershwin

    Gershwin F1 Veteran
    Silver Subscribed

    Feb 21, 2005
    6,415
    Kentucky
    #2 Gershwin, Oct 16, 2007
    Perhaps an appraisal on a collector car, anything to reduce the "value" for tax purposes. Appraisals are somewhat subjective and ratings on a collector car can swing the value substantially between classes.
     
  3. Doug

    Doug Formula 3

    Nov 13, 2003
    1,473
    Louisville KY
    Full Name:
    Doug
    #3 Doug, Oct 16, 2007
    I think that they just want proof that you paid sales tax to 6%. If you purchase a car in a state that charges 4%, then when you bring it in with the paperwork, you will pay the extra 2%. Kentucky likes their taxes.
    Collector cars over 25 years can be registered as Antique and pay no taxes. You are however restricted to club events, parades etc....but that is not exactly enforced.
     
  4. silvergts1998

    silvergts1998 Formula 3

    Apr 10, 2005
    2,426
    ky
    Full Name:
    Adam
    #4 silvergts1998, Oct 17, 2007
    I agree with Doug, They just want to see that you paid sales tax in another state and you get charged the difference. This tax crap is a bunch of BS. I was just thinking of how many times alot of collector cars had paid tax on the same car after it switched between many hands. It adds up.
     

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