Two bills filed to put brakes on skyrocketing Kentucky vehicle taxes
Two bills have been filed that may give taxpayers relief from escalating vehicle property taxes in 2022.
House Bill 6 would allow the Department of Revenue to use a different standard to determine a car’s value than the current method, which uses car values as determined by the National Automobile Dealers Association book, or NADA, sometimes referred to as J.D. Powers.
H.B. 6 was filed by Rep. Patrick Flannery, R-Olive Hill, and several other House members Monday. The bill would also allow people who already paid car tags to get a refund for over payment. People pay automobile taxes in the month of their birthday.
Senate Bill 75 would direct the Department of Revenue to use last year’s vehicle property values to determine car tax rates in 2022 and 2023. The bill was filed Monday by Sen. JImmy Higdon, R-Lebanon.
Jill Midkiff, a spokeswoman for the Finance and Administration Cabinet, said the Department of Revenue is currently reviewing both bills.
Fayette County Property Value Administrator David O’Neill said S.B. 75 seems to be the easiest way to give taxpayers relief from bloated car tax bills. O’Neill has warned taxpayers of the possible increase to vehicle property taxes since early January, when the state Department of Revenue notified PVAs vehicle taxes would go up due to skyrocketing used car values.
“I like the idea of just freezing the values back to last year,” O’Neill said.
Car property taxes are determined by the value of the car. Used car values have skyrocketed in the past year due to supply chain hiccups, which has slowed the production of new cars.
The Kentucky constitution says the state has to set values based on fair cash value. A Kentucky statute also says those valuations must come from a standard manual such as NADA or Kelley Blue Book.
On average, used cars have increased in value by as much as 40 percent from the prior year.
That could mean steep increases for car tags in 2022.
For example, a 2014 Ford F150 was valued at $9,400 last year. It’s new value is $15,800, according to NADA. The owner of the 2014 Ford F150 paid around $133 in automobile taxes in 2021. In 2022, the owner will pay $193, a 45 percent increase from the prior year.
The potential increase in car tags has also become politicized.
During a Monday press conference, Democratic Gov. Andy Beshear said there was a coordinated effort on social media to blame the Beshear administration for the increase in vehicle taxes. The administration has no control over the value of used cars, he said.
“This administration has not increased vehicle tax rates,” Beshear said. “That’s not what is happening. What has happened is your car is worth more.”
This story was originally published January 11, 2022 at 12:08 PM.
