Rising Vehicle Values May Lead to Higher Property Taxes | Kentucky News
FRANKFORT, Ky. (AP) — The rising value of used vehicles during the pandemic could lead to a sharp increase in property taxes on them, Kentucky officials said.
“Overall, the increase in vehicle valuation in 2022 compared to vehicles at the same time last year is up about 40%,” said Kentucky Department of Revenue’s valuation director. , Cathy Johnson, in a Jan. 6 letter to county property value administrators.
New values for vehicles in Kentucky are set in December and are based on book values from the National Automobile Dealers Association, the Lexington Herald-Leader reported. The Kentucky constitution states that the state must establish values based on fair cash values that come from a standard handbook.
That means the cost of vehicle tags in 2022 will rise if lawmakers don’t intervene, Fayette County Property Values Administrator David O’Neill told the newspaper.
For example, a 2014 Ford F150 was valued at $9,400 last year and the tax would have been around $133. Its value is now $15,800 and the tax would be around $193, he said.
Used car prices have soared as new cars have become scarcer due to supply chain shortages caused by the coronavirus pandemic.
“It’s unfortunate,” O’Neill said. “Hopefully the legislature will be able to resolve this issue possibly using assessments from two years ago.”
Lawmakers have introduced two bills aimed at relieving taxpayers of rising property taxes on vehicles.
An internal bill would allow the Department of Revenue to use a different standard to determine the value of a car than the current method. The bill would also allow people who have already paid for car tags to get a refund for the overpayment. The measure was introduced by Republican Representative Patrick Flannery and several other members of the House.
A Senate bill would direct the Revenue Department to use last year’s vehicle ownership values to determine car tax rates in 2022 and 2023. The bill was introduced by the Republican senator Jimmy Higdon.
Gov. Andy Beshear said Monday there was an effort on social media to blame his administration for the vehicle tax hike. The administration has no control over the value of used cars, he said.
“This administration has not raised vehicle tax rates,” Beshear said. “That’s not what’s happening. What happened is that your car is worth more.
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