Kentucky Gov. Andy Beshear officially signed a bill into law yesterday officially freezing the vehicle property tax rate. Rep. Sal Santoro of Union was one of the co-sponsors for House Bill 6. Santoro joined Beshear at the official signing of the bill.
House Bill 6 requires a vehicle to be valued at its average trade in value and not the rough trade in value or the clean trade in value as the standard value of a motor vehicle for property tax purposes. The new law will also grant refunds for tax overpayments, and requires posting of the tax information. This applies to vehicles assessed on or after Jan. 1, 2022.
“It is aimed at providing relief to motor vehicle property taxes at a time when the value of peoples’ used cars is soaring making people’s bill go up,” Beshear said. “I was able to sign an executive order to get a head start on freezing the values that people are paying off of to last year’s values, but this codifies a step Rep. Santoro started even before.”
In February, Beshear signed an executive order to freeze vehicle property taxes and to refund tax overpayments. Beshear previously said his executive order would amount to about $340 million in reduced vehicle property taxes.
“It means no one will pay more this year than they did last year,” Beshear said. “It ensures that people are going to get a little bit of relief, more than $300 million going back to Kentucky taxpayers. We appreciate this legislation. It’s going to help our folks.”
Beshear says the bill will allow Kentucky to get a “head start” on vehicle property tax relief efforts.
On Jan. 6, the Kentucky Department of Revenue, Office of Property Valuation released a memorandum that estimated vehicle valuations will increase approximately 40 percent during 2022 in an assessment done by J.D Power.
The main contributing factors causing the rise in vehicle valuations were new vehicle production and inventory constraints, rising new vehicle transaction prices, computer chip shortages, a limited supply of vehicles, and an increased interest in used-vehicle operations.
“This was one of the issues that when we came into session I was receiving a lot of calls from constituents that they were upset, Santoro said. “Usually, the value of your car does not rise. Usually you buy it, and it stays steady and then drops. So this is really a relief for our families in Kentucky. And I had a lot of support on this, and I’m very glad it’s being signed into law.”
For more context paying your vehicle valuation taxes or seeking your overpayment refund if you’re a resident of Kenton or Campbell County, check out our reporting on previous updates from both their county clerks.