Kentucky Implements New System to Collect Motor Vehicle Property Tax

Old Car Owners Can Provide Evidence to Lower Assessment

The Kentucky Motor Vehicle Property Tax Assessment office is in the process of implementing a new system by which vehicle property taxes are processed (KAVIS).  While the system has changed, the legal tax assessment has not been raised.  The assessment remains as a percentage (25 cents per $100) of the valuation recorded in the NADA guide.  Given that the new system is not capable of processing valuations for vehicles older than 25 years old, these valuations will be entered manually by the county property valuation assessors (PVAs).  Previously, and in conflict with the law, the PVAs had substantially undervalued these vehicles for tax purposes which resulted in vehicle owners paying a minimal fee.  In an effort to collect taxes on the real “fair market value,” the PVAs have now been directed by the Department of Finance to value these vehicles consistently at the low end of the NADA valuation guide.  These valuations are still higher than the valuation that had previously been put on these cars, resulting in a higher tax obligation for owners.

However, the vehicle owner is able to lower the assessment by providing evidence to the local PVA that the vehicle is now being overvalued.  PVAs are authorized to override the NADA-based assessment and adjust the tax.  Such evidence would include photographs, repair estimations or competing valuations.  According to the Department, after the valuation has been adjusted, it will not change going forward regardless of the updated condition of the car.        

Again, there has been no change to the law.  The Department is attempting to enforce the current law through stricter administration and greater adherence by the PVAs.