Ky.gov

Effective January 1, 2023, ​House Bill 8 imposes a new 6% excise tax on the privilege of providing a motor vehicle for sharing or rent within the Commonwealth.

The new statutory language is provided in KRS 138.472.

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​No.  If you provide HSTD services, please contact the Department of Revenue regarding registration requirements.​

​The Motor Vehicle Rental/Ride Share Excise Tax is imposed upon the gross receipts of: 

  1. peer-to-peer car sharing companies
  2. motor vehicle rental companies
  3. transportation network companies (TNCs)
  4. taxicab service providers and
  5. limousine service providers

​KRS 281.010 provides further definitions related to these groups.  Each of these groups must be licensed through the Kentucky Transportation Cabinet, under the provisions of KRS 281.630. These providers may collect the tax from their customers as a separate charge.

  • ​Vehicle license cost recovery fees- Yes, these charges are expenses of the provider passed on to the customer as taxable charges for using the services.
  • Airport concession recovery fees- Yes, these charges are expenses of the provider passed on to the customer as taxable charges for using the services.
  • Airport consolidated facility charges- Yes, these charges are expenses of the provider passed on to the customer as taxable charges for using the services.
  • Local, municipal license fee imposed under KRS 68.200- No, this charge is a fee that providers must collect from their customers and remit to the imposing local taxing jurisdiction.
  • U-Drive-It Tax imposed under KRS 138.463- No, this is a tax imposed on holders of U-Drive-It permits and calculated on the gross rental or lease charges paid by the customer.
  • Tolls and parking fees- Yes, these charges are expenses of the provider passed on to the customer as taxable charges for using the services.
  • Gratuities- No, voluntary gratuities are not included. Yes, mandatory gratuities are charges for services necessary to complete the transaction.

Gross receipts subject to the tax means the total consideration received for the rental of a vehicle or any charges made to provide the taxable services to a customer. These charges include daily or hourly rental fees, time or mileage charges, fees for using the services, fuel charges, pickup and delivery fees, late fees, and any charges for any services necessary to complete the transaction.​​

  • Rentals or services that originate in Kentucky and terminate outside Kentucky- Yes.
  • Rentals or services that originate outside Kentucky and terminate outside Kentucky, but come through Kentucky-No.
  • Rentals or services that originate outside Kentucky and terminate in Kentucky-No.
  • Rentals or services that originate in Kentucky and terminate in Kentucky-Yes.

​The Motor Vehicle Rental/Ride Share Excise Tax is due monthly on the 20th day of the month following the end of the month in which the rentals/ride shares occurred​.

The Motor Vehicle Rental/Ride Share Excise Tax is filed and paid electronically with the Department of Revenue. More guidance is available at this at this link. ​

Registration information for the Motor Vehicle Rental/Ride Share Excise Tax is available at this at this link.​

​Yes, if the 6% Motor Vehicle Rental/Ride Share Excise Tax is charged to the end consumer, then the 6% excise tax must be separately stated on the corresponding rental contract and receipt.

​No, a motor vehicle dealer in the loaner/rental program is not subject to the Motor Vehicle Rental/Ride Share Excise Tax.

​No, the Motor Vehicle Rental/Ride Share Excise Tax is filed and paid separately to the Department of Revenue and the U-Drive-It Tax is filed and paid to the Transportation Cabinet Division of Motor Carriers.​

​The Motor Vehicle Rental/Ride Share Excise Tax is imposed upon the persons providing the rentals or ride sharing services regardless of the tax status of the customers; therefore, there are no exemptions from tax due on the rental or ride share receipts.​

​A rental customer under a one-year agreement with a rental contract rewritten every 30 days is a rental subject to the Motor Vehicle Rental/Ride Share Excise Tax. A rental is a contract for the use of a motor vehicle for less than 365 days. A lease would be a contract of 365 days or more. See KRS 138.462​

​No, the following Kentucky Transportation Cabinet motor carrier certifications are NOT subject to the new Rental/Ride Share Excise Tax:

  • Disabled person vehicle certificate
  • Household goods certificate
  • Charter bus certificate
  • Bus certificate
  • Property certificate
  • Driveaway certificate
  • Automobile utility trailer certificate 
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