Kentucky motor vehicle usage tax and clerk fees

The usage tax and the affidavit of total consideration

The 6% usage tax is charged on the "retail price" the first time a vehicle is titled or registered in a new owner's name. For a new car that price is the total consideration minus the trade-in allowance, as long as buyer and seller sign the notarized affidavit that dealers routinely prepare; without it, the clerk taxes 90% of the sticker price. Manufacturer and dealer rebates applied at purchase, extended warranties and service contracts are not part of the taxed amount. Kentucky has no county or city sales tax on vehicles, so the rate is the same in Louisville, Lexington and the smallest county.

Used cars and private sales

A car bought from a private seller is taxed the same way, on the price stated in the affidavit, with one safeguard: the statute does not accept a price lower than 50% of the gap between the book trade-in values of the car bought and of any car traded. An $18,000 used electric car bought privately costs $1,235.50 at the clerk, the ownership fee included. A car brought from another state is checked once by the sheriff's certified inspector before titling, for $15 when the owner is an individual.

Plug-in fees and the property tax bill

The ownership fee covers any vehicle with plug-in charging capability, fully electric or plug-in hybrid. It started at $120 and rose to $126 on January 1, 2025, while ordinary hybrids stopped paying in 2025. The property tax is the bigger yearly cost: the Department of Revenue values each vehicle on January 1, and the clerk bills the state and local rates at renewal, so a car bought during the year is first taxed at the following renewal. Indiana uses an excise table instead, and Tennessee has no yearly tax on a car's value.

What sets Kentucky apart

• Kentucky collects a 6% motor vehicle usage tax, not a sales tax, when a vehicle is first titled or registered in the state (Kentucky Department of Revenue).
• Since July 1, 2014 the trade-in allowance is deducted from the price of a new car before the 6% is applied (KRS 138.4603).
• Without a notarized affidavit of total consideration, the tax on a new car is computed on 90% of the manufacturer's suggested retail price (KRS 138.4603).
• On a used car the taxed price cannot fall below 50% of the difference between the book trade-in values of the car bought and the car traded (KRS 138.450).
• A certificate of title application costs $9, of which the county clerk keeps $6 (KRS 186A.130).
• The yearly registration is $11.50 for a car or pickup, plus the clerk's $6 and an additional $3 per registration (KRS 186.040).
• Electric cars and plug-in hybrids pay an ownership fee at first registration and every renewal, $126 since January 1, 2025, while ordinary hybrids no longer pay one (Kentucky Transportation Cabinet).
• The base ownership fee in the statute is $120 and it applies to any vehicle with plug-in charging capability, whether fully electric or a plug-in hybrid (KRS 138.475).
• Every vehicle also owes an annual property tax, paid to the owner's county clerk (Kentucky Department of Revenue).
• A car brought in from another state must be checked by a certified inspector at the sheriff's office before titling, for a $15 fee for an individual (KRS 186A.115).

What the Kentucky calculation cannot know

• Every Kentucky vehicle owes a yearly property tax assessed as of January 1 and paid to the county clerk with the renewal; the state and local rates apply to a book value the form does not ask, so it is shown without an amount (a car bought during the year is first taxed at the next renewal).
• On a used car the usage tax base cannot be lower than 50% of the difference between the reference-manual trade-in values of the car bought and of the car traded; a price far below book value would be taxed on that floor, which the calculator does not apply.
• Without a notarized affidavit of total consideration, a new car is taxed on 90% of the MSRP instead of the price; the calculator assumes the affidavit is provided, as dealers normally do.
• Whether a dealer documentary fee is part of the 'total consideration given' is not stated in the statute; the calculator leaves it out of the taxable price.
• The electric vehicle ownership fee ($120 base, adjusted each January 1 with the electric vehicle power tax) was $126 from January 1, 2025; the Department of Revenue page read in October 2026 lists no adjustment after that date, so $126 is used for 2026.
• Kentucky law sets no cap on the dealer documentary fee that was found for this release; type the dealer's fee.