Gov. Beshear provides vehicle property tax relief, proposes state sales tax decrease

FRANKFORT, Ky. – Gov. Andy Beshear announced today that he is providing immediate vehicle property tax relief and proposed a temporary 1% drop in the state sales tax in order to assist Kentuckians during a time of inflation.

This change would bring $1.2 billion in tax relief for the state, with $873 million of that savings coming from the sales tax decrease and $340 million from vehicle property taxes.

Beshear said the state budget allows a chance to implement these changes to “help our working families and small businesses buy and sell the essential goods and services that are costing more and that are simply priced too high.”

The sales tax will bring relief on goods outside of food and medicine at grocery stores, which are already exempt from state taxes. This lower tax would also apply to expenses such as building materials, hardware and clothes.

“We have all had enough – and today I am doing something about it by providing immediate vehicle property tax relief and proposing a cut in the sales tax.”

The property valuation for the average motor vehicle in Kentucky rose from $8,006 to $11,162 in just one year. The Governor said a Kentuckian will instead pay a tax amount similar to last year if they own the same vehicle in the same condition and are living in the same county since then. In addition, they will not pay taxes on the inflated value for the next two years.

Those that have already paid their vehicle property tax for 2022 will be issued a refund from their local county clerk’s office.