Kentucky [KY] Vehicle Sales Tax & Fees [+ Calculator]

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Michael Collado

Michael Collado

Michael Collado is a car buying expert and has been a professional automotive writer since 2009.  He’s written about dealership sales, vehicle reviews and comparisons, and service and maintenance for over 100 national automotive dealerships.  Previously, Collado was a copywriter at the ad agency TBWA/Chiat/Day where he worked on brand campaigns for Nissan, ABC Television, Sony PlayStation, and Energizer. His recognition in the ad industry includes awards from Communication Arts and The Clios.

Collado has a Bachelor’s degree from the University of South Florida, with a major in Psychology and a minor in Marketing.

Ready to buy a car in the state of Kentucky?

Then you should be aware of the 6% sales tax that you will have to pay on a new or used vehicle.

Here, we will take a look at the current sales tax rate for car sales in Kentucky along with other associated DMV fees.

How Much Is the Car Sales Tax in Kentucky?

The state of Kentucky has a flat sales tax of 6% on car sales.

Kentucky does not charge any additional local or use tax.

How to Calculate Kentucky Sales Tax on a Car

To calculate the sales tax on your vehicle, find the total sales tax fee for the city and/or county. For Kentucky, it will always be at 6%. Multiply the vehicle price (before trade-ins but after incentives) by the sales tax fee.

For example, imagine you are purchasing a vehicle for $45,000 with the state sales tax of 6%. You trade in a vehicle for $5,000 and get an incentive for $2,000. Kansas does charge tax on trade-ins but not on rebates, so you would subtract $2,000 from the car cost, to get $43,000, which is the taxable amount.

In this example, multiply $43,000 by .06 to get $2,580, which makes the total purchase price, $40,580 (account for trade-in).

Calculate Car Sales Tax in Kentucky Example:

• Initial Car Price: $45,000
• Sales Tax Rate: 6%
• Trade-in Amount: $5,000
• Rebate/Incentive Amount: $2,000

Sales Tax = ($45,000 - $2,000) * .06
Sales Tax = $2,580

Remember that the total amount you pay for a car (out the door price) not only includes sales tax, but also registration, and dealership fees.

Kentucky Sales Tax Calculator

Do I Have to Pay Sales Tax on a Used Car?

Yes, a 6% state sales tax applies for used vehicle sales in Kentucky.

Which County Has the Highest Tax? Which Has the Lowest?

Kentucky has no additional county or city taxes. No matter where you live in Kentucky, the sales tax on a new or used vehicle will be 6%.

Car Sales Tax for Trade-Ins in Kentucky

You do have to pay a sale tax on the trade-in on your vehicle in the state of Kentucky.

In other words, when calculating sales tax, be sure to use the full price of the car without subtracting the trade-in value.

Let’s say that you're purchasing a new car for $45,000, and your trade-in is valued at $12,000. Regardless of the trade-in amount, the taxable amount is still $45,000.

Car Sales Tax on Private Sales in Kentucky

If you purchase a vehicle from a private party, then you will still have to pay the 6% state sales tax.

As an example, let’s say that you purchase a used SUV for $25,000. The 6% sales tax on that purchase will be $1,500.

Tax on Rebates & Dealer Incentives

The state of Kentucky does not tax rebates and dealer incentives. In other words, be sure to subtract the incentive amount from the car price before calculating the sales tax amount.

As an example, let’s say you want to purchase a new truck for $46,000 and the dealer provides a $4,000 rebate. You do not have to pay a sales tax on the $4,000 rebate. Therefore, the taxable amount is $42,000.

Kentucky DMV & State Fees

Kentucky charges the following DMV and state fees:

• Registration & Renewals (Car, Non-Commercial): $21
• Registration & Renewals (Motorcycle): $18.50
• Title Fee: $9.00
• Plate Fee: $21.00 / Year
• VIN Inspection: $5.00

Other fees may apply in special situations.

For instance, if you are late in registering your vehicle, then you may have to pay a fee. Also, there are fees that may be applied if you have special vehicles such as farm equipment.

Kentucky Dealership Fees

Kentucky dealerships may charge the following fees:

• Document Fee: ~$315 (No Statewide Limit)

When Sales Tax Is Exempt in Kentucky

You can avoid paying sales tax on a vehicle sale if the vehicle is received as a gift.

Also, vehicles that are registered in another state within 30 days after purchase are also exempted from state sales tax.

Kentucky EV Rebates & Incentives

Currently, Kentucky does not offer any EV rebates or incentives. However, EV vehicles purchased in Kentucky are still eligible for the Federal tax credit.

Tax information and rates are subject to change, please be sure to verify with your local DMV. 

Frequently Asked Questions

What is the sales tax on a car purchased in Kentucky?

The statewide tax on vehicle sales is a flat 6% in all counties and cities.

Do I have to pay sales tax on a used car in Kentucky?

A flat 6% state sales tax applies to all used vehicle sales in Kentucky.

Which county in Kentucky has the lowest tax? Which has the highest?

All counties in Kentucky do not have their own local tax. Therefore, the uniform tax rate for all Kentucky vehicle sales is 6%.

Do I have to pay sales tax on a gifted car in Kentucky?

You do not have to pay tax on a gifted vehicle in Kentucky.

How much is registration in Kentucky?

The following registration fees apply to vehicles in Kentucky:

• Registration & Renewals (Car, Non-Commercial): $21
• Registration & Renewals (Motorcycle): $18.50

Does a trade-in reduce sales tax in Kentucky?

No, Kentucky's tax rate applies to the full purchase price of the vehicle. For example, if a car costs $20,000 and the trade-in amount is $5,000, you would still pay tax on the full $20,000.

How can I avoid paying sales tax in Kentucky?

You can avoid paying sales tax on vehicles if you receive a car as a gift. Also, if you register the vehicle in another state within 30 days then you don’t have to pay the Kentucky sales tax.