Motor vehicle owners in Kentucky are paying considerably higher vehicle taxes when renewing licenses at the county clerk’s office.
According to information from the Kentucky Department of Revenue Office of Property Valuation, the annual vehicle year-end valuation was conducted on December 31, 2021, for 2022. State Division of Valuation Director Cathy Thompson said in a letter county clerks the new assessments compiled by J. D. Power reflect the significant increased value of most motor vehicles in 2021. Thompson says overall the 2022 valuation increase for vehicles compared to the same time in 2021 is up approximately 40 percent.
The letter notes while the valuations result in a higher resale value for the consumer, they also result in higher property tax bills. The reasons for the increase include new vehicle production and inventory constraints, elevated new vehicle sale prices, ongoing limited supply of used vehicles, and increased dealer interest in used vehicles.
Thompson notes the Kentucky Constitution requires all property to be listed at its fair cash value or estimated price it would bring at a voluntary sale. The new values represent the Department of Revenue’s efforts to uphold that standard.