BILL INTRODUCED DIRECTING GOVERNOR BESHEAR TO RELIEVE VEHICLE TAX BURDEN FACING KENTUCKIANS

Residents whom already paid taxes can see a refund

FRANKFORT, KY (February 8, 2022) – On Monday, state Sen. Donald Douglas, M.D. (R-Nicholasville) introduced Senate Joint Resolution 99 (SJR 99) which will direct Governor Andy Beshear to order the Kentucky Department of Revenue (DOR) to shield Kentucky taxpayers from pandemic-inflated valuations of automobiles.

COVID-19 has negatively impacted automobile manufacturing, disrupting the supply chain and increasing used vehicle values. Automobile taxes in Kentucky are a percentage of a vehicle's assessed value. The DOR has reported motor vehicle valuations have increased as much as 40 percent compared to the previous year. J.D. Power and other sources forecast used vehicle values will begin their descent to more normal levels by late 2022 or early 2023.

A memorandum sent from DOR earlier this year spurred significant attention from the public and lawmakers. SJR 99 is the latest measure introduced to provide peace of mind to Kentucky taxpayers facing skyrocketing motor vehicle taxes amid the already challenging times brought on by COVID-19 and mitigation efforts from the government.

"There may be no policy issue generating more attention from the general public this session than news of higher vehicle property taxes," Douglas said. "In my observation, the simplest resolution to these higher taxes rests in the hands of the Governor's administration."

Douglas serves on the Senate Appropriations and Revenue Committee, which handles matters on appropriations of taxpayer dollars and levying state and local taxes. SJR 99 has been assigned to the A&R Committee. It will be presented and considered during the committee meeting at 9 a.m. Wednesday.

"We need to act to help our people, and I'm disappointed action has not been taken by the administration to exempt our constituents from this tax burden," Douglas said. "I believe strongly in working together to better our communities, and this is an issue residents care deeply about. We need to make this right."

Joint resolutions of the Kentucky General Assembly do not modify state statutes but do carry the force of law.

Douglas proposed SJR 99 after discussion with fellow lawmakers and reviewing Kentucky Revised Statute 132.485. The statute permits "deviation from the standard value" if information is available to warrant it.

"The rise in the motor vehicle tax is a significant deviation from the norm because of the unprecedented times we find ourselves in," Douglas said. "This part of the law is significant. If a once-in-a-lifetime pandemic does not warrant deviation here, nothing ever will."

SJR 99 will require DOR to use a motor vehicle's 2021 assessed value as the base for taxes in 2022 and 2023. This protects Kentucky vehicle owners from artificially inflated motor vehicle valuations resulting in an increased motor vehicle property tax. Additionally, SJR 99 is retroactive for taxpayers who have already paid their motor vehicle tax. Those residents will be provided an automatic refund.

"I've introduced Senate Bill 75 and have been in discussion with a lot of my colleagues to find the appropriate remedy," Sen. Jimmy Higdon (R-Lebanon) said. "Dr. Douglas made a great find in state law, and he has been one of the most engaged and committed to finding the best solution."

Higdon serves as chair of the Senate Transportation Committee.

"I think SJR 99 may be the best prescription, so I appreciate Dr. Douglas introduced it," Higdon said. "It will have my support, and I trust the support of a lot of other lawmakers."

If passed by both chambers of the Kentucky General Assembly, the resolution will be delivered to the governor for consideration. The governor will have the option of signing it into law, allowing it to become law without his signature or vetoing it. In the case of a veto, lawmakers can consider a veto override. The resolution carries an emergency clause and would immediately be effective upon filing with the Kentucky Secretary of State.