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Recreational Vehicles

Dealer Guidance on Recreational Camper Trailers Subject to Motor Vehicle Usage (MVU) Tax

What types of recreational vehicles previously subject to sales and use tax are now subject to motor vehicle usage tax?

HB 360 amended KRS 138.450 to include “recreational vehicles” within the definition of motor vehicles even if the vehicles are non-motorized. “Recreational vehicle” means any motor home, travel trailer, fifth-wheel trailer, pull-behind camper, or pop-up camping trailer, which; (a) contains living quarters; and (b) is required to be licensed for use on the public highways.

When will the tax on the purchase of recreational vehicles be paid?

The MVU tax is due at the time the vehicle is registered and/or titled at the Kentucky county clerk’s office in the same manner that other motor vehicles are taxed. Retailers should no longer collect and remit sales tax on these transactions on sales beginning on or after 07/01/2023.

How will motor vehicle dealers and other retailers report the sales of recreational vehicles on their sales and use tax returns?

Retailers must report gross receipts from the sale of recreational vehicles on the “Total Receipts” line of the sales and use tax return and then claim the amount as a deduction from taxable receipts as a sale of a motor vehicle subject to MVU. Retailers should no longer collect sales tax on the sale of any recreational vehicles sold to Kentucky residents.

Are there any exceptions to how the MVU tax applies to sales of recreational vehicles?

For certain out of state customers that take their vehicles back to their home states for use and registration, retailers will continue to charge and collect the 6% Kentucky sales tax. Some states tax Kentucky residents and other out of state residents on their purchase of recreational vehicles (non-reciprocal states); therefore, Kentucky applies the same treatment for purchases by these out of state residents in our state. Retailers must collect and remit the 6% Kentucky sales tax on recreational vehicles sales made in this state to customers from the following states: California, Florida, Arizona, Massachusetts, South Carolina, Michigan, Wisconsin, North Carolina, and Hawaii.

Are there any special reporting requirements associated with the collection of sales tax on recreational vehicles purchased in KY by an out of state resident from a non-reciprocal state?

Yes, in addition to filing the sales and use tax return, retailers reporting sales of recreational vehicles must complete and submit the Motor Vehicle Sales Tax Supplementary Schedule, Form 51A135. This supplementary filing is the same process used by dealers selling motor vehicles to non-residents from non-reciprocal states used previously. DOR has revised this form to now include recreational vehicles as defined under the provisions of HB 360. The data collected from these filings enables the department to properly credit the Road Fund for the sales tax collected on these vehicles. The supplementary schedule, including instructions, is available at the link below:

KENTUCKY SALES AND USE TAX - MOTOR VEHICLE DEALERS SUPPLEMENTARY SCHEDULE

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