601 KAR 1:145. Reporting and paying of usage tax pursuant to a U-drive-it permit.
RELATES TO: KRS 138.463, 138.4631, 154.45-090(6), 186.281(3), 281.626, 1998 Ky. Acts ch. 166
STATUTORY AUTHORITY: KRS 186.281(2)(c), 1998 Ky. Acts ch. 166, sec. 1
NECESSITY, FUNCTION, AND CONFORMITY: KRS 138.463 requires the Transportation Cabinet to assess and collect the monthly U-drive-it usage tax. KRS 186.281(3) requires the holder of a U-drive-it permit to pay a fifteen (15) dollar annual seat tax for each U-drive-it passenger car. This administrative regulation establishes the procedure for submitting information on each motor vehicle in the program and for reporting and paying of the monthly usage tax and the annual seat tax.
Section 1. (1) A U-drive-it motor carrier who has been issued a permit pursuant to 601 KAR 1:140 shall provide information to the Transportation Cabinet identifying each motor vehicle to be operated under the provisions of the U-drive-it permit.
(2) Notification to the Transportation Cabinet with the vehicle identification information for a motor vehicle which is to be:
(a) Rented or leased shall be made on Transportation Cabinet form TC 95-53, "Application for U-drive-it Registration"; or
(b) Loaned as allowed in 1998 Ky. Acts ch. 166, Section 1 shall be made on Transportation Cabinet form TC 95-53-L, "Application for U-drive-it Registration Loaner."
(3) The U-drive-it permit holder on this application shall agree to pay the seat tax imposed by KRS 186.281(3) with the first month’s usage tax on the motor vehicle pursuant to KRS 138.463.
(4) The vehicle identification information shall be submitted annually prior to the expiration of the motor vehicle’s registration license plate.
(5) The first time a U-drive-it permit holder applies for a vehicle registration for a particular motor vehicle, he shall attach a copy of one (1) of the following to either the "Application for U-drive-it Registration" or the "Application for U-drive-it Registration Loaner":
(a) The front and back of the manufacturer’s certificate of origin; or
(b) The motor vehicle title.
(6) The U-drive-it permit holder shall submit the application form to the Department of Vehicle Regulation, Division of Motor Carriers.
Section 2. (1) A vehicle used as a loaner vehicle or shall not be operated under a U-drive-it permit until the permit holder has:
(a) Agreed to pay the applicable seat tax imposed by KRS 186.281(3); and
(b) Supplied the vehicle registration information for the vehicle.
(2) If a vehicle ceases to be used as a loaner vehicle or operated under a U-drive-it permit, the permit holder shall apply to the jurisdictional county clerk for an amended registration form for the motor vehicle within fifteen (15) days.
Section 3. (1) A holder of a U-drive-it permit who reports and pays the tax imposed by KRS 138.463 shall report the tax on a monthly basis on Transportation Cabinet form TC 95-9, "Kentucky U-drive-it Monthly Usage Tax Return", or through an electronic equivalent of the form which has been preapproved by the Transportation Cabinet.
(2) The monthly tax report shall include the following for each motor vehicle identified as part of the program:
(a) The total amount of the lease or rental agreements for the month being reported;
(b) The amount of usage tax owed pursuant to KRS 138.463 for the month being reported; and
(c) On the first submittal for that registration period, the seat tax owed pursuant to KRS 186.281 for the entire registration period.
(3) The tax report and tax payment shall be due on or before the end of the succeeding month following the period covered by the tax report.
(4)(a) The tax reported and paid to the cabinet for any rented or leased vehicle shall not be less than the equivalent to the amount due on the fair market value of a vehicle of like kind as set forth in 601 KAR 1:146, regardless of the terms of the rental or lease agreement.
(b) The tax reported and paid to the cabinet shall not be less than the amount due based on the actual terms of a rental or lease agreement.
(5)(a) A motor vehicle dealer shall report and pay to the Transportation Cabinet the usage tax on a loaner vehicle as if it were a leased motor vehicle.
(b) the fair market lease amount shall be established pursuant to 601 KAR 1:146, Section 4, if applicable to the dealer or Section 5 if Section 4 is not applicable to the dealer.
Section 4. (1) A holder of a U-drive-it permit with vehicles registered pursuant to an approved fleet registration allocation shall report and pay to the department the monthly usage tax at the rate imposed by KRS 138.463 on all vehicles rented from all its Kentucky locations regardless of the state of licensing of those vehicles.
(2) The U-drive it permit holder shall also license in Kentucky, pay the applicable seat tax imposed by KRS 186.281, and identify on Transportation Cabinet form TC 95-53 the number of vehicles at least equal to the number of vehicles to be registered in Kentucky by the approved allocation formula.
Section 5. (1) A U-drive-it permit holder who under the terms of KRS 154.690 claims exemption from the payment of usage taxes shall file annually with the Department of Vehicle Regulation a copy of his certificate from the Enterprise Zone Authority of Kentucky.
(2) If a U-drive-it permit holder obtains an exemption under KRS 154.690 at any time after his initial application for a U-drive-it permit, he shall file a copy of the certification with the department prior to claiming the exemption from the payment of the usage tax.
(3)(a) If a U-drive-it permit holder ceases to be certified under KRS 154.690, he shall immediately notify the department in writing.
(b) A U-drive-it permit holder who loses his certificate under KRS 154.690 and who is eligible under KRS 138.463 to elect as to the payment of the usage tax shall make this election at the time he notifies the department of his loss of certification.
Section 6. If a vehicle on which the usage tax is being paid pursuant to KRS 138.463 is transferred to another party under the conditions set forth in KRS 138.463(9)(e), the U-drive-it permit holder shall not claim credit for any usage tax remitted for the vehicle.
Section 7. (1) A motor vehicle dealer paying the usage tax on a loaner vehicle pursuant to 1998 Ky. Acts ch. 166, Section 1 shall:
(a) Be subject to the audit provisions of 601 KAR 1:146;
(b) Maintain a log for each vehicle registered under that loaner permit number which includes the following:
1. Beginning and ending loan dates;
2. Customer name;
3. Beginning and ending odometer reading for each loan; and
4. Reference number to the repair authorization document on the customer’s motor vehicle; and
5. Retain the repair authorization document associated with each loan.
(2) The log required in subsection (1)(b) of this section may be replaced with prenumbered loan agreement forms which contain the information required in that paragraph.
(3) The log, repair authorization document, and prenumbered loan agreement forms shall be retained for six (6) years.
Section 8. (1) The following material is incorporated by reference in this administrative regulation:
(a) Transportation Cabinet form TC 95-53, "Application for U-drive-it Registration", July 1998 edition;
(b) Transportation Cabinet form TC 95-20, "Kentucky U-drive-it Monthly Usage Tax Return", July 1998 edition; and
(c) Transportation Cabinet form TC 95-53-L, "Application for U-drive-it Registration Loaner", July 1998 edition.
(2) The material incorporated by reference may be viewed, copied, or obtained from the Transportation Cabinet, Department of Vehicle Regulation, Division of Motor Carriers, 501 High Street, Frankfort, Kentucky 40622. The telephone number is (502) 564-4540. The hours of operation are 8 a.m. through 4:30 p.m. eastern time on weekdays. (16 Ky.R. 1531; eff. 3-8-90; Am. 25 Ky.R. 422; 873; 1040; eff. 11-20-98.)