Barger/Ackerman discuss soaring vehicle values and potential higher car taxes

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The demand for new and used vehicles is far outpacing the supply.  Because of the pandemic, the inability of car manufacturers to get “chips” and a virtual shortage of anything and everything, it has been the perfect storm to drive up prices.  You will notice the inventory on many Madison County car lots is much thinner than usual. Dealers have had to get creative with vehicle placement in some cases to keep up appearances of a good selection.


Truth of the matter is, finding what you want is harder, and if you do, paying for it hurts more too.  On average around 30% increase on most every vehicle.  Not only will that mean more taxes when you purchase a vehicle, but most of us will also see higher taxes on our current vehicles when we go to license them in 2022.  
Most people would expect their vehicles value to go down with each passing year Consequently, so would your taxes. This year, it’s highly likely that vehicle value will be higher, and your tax bill will be too. This is a birthday spoiler since licensing occurs in your birth month.


Madison County Clerk Kenny Barger says, “There are ways to have your valuation adjusted and possibly lowered for certain circumstances.  If it’s been damaged or wrecked or has excessive miles, etc. If you feel any other factors could have a bearing on your vehicles value, you will need to discuss that with the Madison County PVA’s office prior to getting your vehicle licensed.”

Billy Ackerman, Madison County PVA provides this information to assist:

Vehicle assessments may be adjusted at the PVA Office for specific reasons allowed by the State – the most common adjustments are for vehicles with high mileage or damage.  High mileage adjustments are calculated using the J.D. Powers January 1st online guide; typical documentation includes a dated oil change or auto repair receipt that lists the mileage of the vehicle.  Damaged vehicle adjustments are made using a repair shop estimate of repair for parts and material provided by the owner; repair labor is not allowed to be included in the damage adjustment per State guidelines.  All assessments and adjustments are made based on the condition of the vehicle on January 1st.
Below are some excerpts from the Kentucky Department of Revenue PVA MOTAX Manual (03/27/20):
The standard value of motor vehicles shall be the average trade-in value prescribed by the valuation manual unless information is available that warrants any deviation from the standard value.
1. All automobiles, pickups, boats, boats trailers, motorcycles, and recreational vehicles must be assessed at the NADA (J.D. Powers) or appropriate guide trade-in value as of January 1 of each year. If no adjustments, the AVIS assessment should match the January 1 NADA clean trade-in value, or the equivalent, in conjunction with KRS 132.485.

High Mileage
The Cabinet recognizes the use of the High Mileage Table in the NADA guide. The PVA may consider high mileage as a basis for value adjustments. However, pursuant with NADA guidelines, the high mileage deductions shall not exceed 40% of the NADA average trade-in value as of January 1 of the tax year.  

Damaged Vehicle
Damage to a vehicle on January 1 of the tax year may be deducted from the trade-in value for that year. Damage deductions for parts and materials shall not exceed a professional estimate. The cost of labor is not included in the damage deduction. A combination of the deductions shall not reduce the assessment to 25% or less of the average trade-in value.

Below is a link to a news report that includes comments from Cathy Thompson, DOR.
https://www.wkyt.com/2021/12/02/wkyt-investigates-rising-car-taxes/

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Kelly Wallingford is a Powell County Kentucky graduate of 1980, and the fall of that year, started his radio career as a evening DJ at WEKG/WJSN in Jackson, Ky, while attending Lee's Jr. College. The principles of WEKG/WJSN also owned WIRV-AM in Irvine, where Wallingford soon transitioned. Wallingford eventually bought in as a part owner of WIRV. He later bought out his partner and launched WCYO-FM "The Coyote" in 1992. In 1999, Wallingford acquired WEKY-AM, WKXO-AM, and WKXO-FM in Madison County. Soon, WKXO -FM was rebranded as 106.7 'The Dog'. In 2016, Wallingford added three more FM's to the company. 99.3 in Irvine, 92.5 in Richmond, and 103.5 in Berea. The companies growth and expansion has been extensive, and 2017 marks the transition into Richmond's first TV station, WBON-TV, as well as web, phone apps, and other digital media products for our clients in the greater Richmond area. Wallingford resides with his wife Bess on their Madison County farm, complete with cattle, horses, dogs and kitties.