LOUISVILLE, Ky. (WDRB) -- Kentucky Gov. Andy Beshear signed an executive order Wednesday to halt an increase in vehicle property taxes caused by rising car values.
Last month, state officials notified county officials that 2022 overall valuation for vehicles would go up about 40%. For many vehicle owners, it meant a big increase in their tax bills. The tax rate remained the same as previous years, but escalating used vehicle values caused the amount of taxes owed by some to go up, the state revenue department said.
In a news release Wednesday, Beshear said Kentuckians will pay about the same as 2021 if they own the same vehicle, which is in the same condition, and live in the same county. He added that people won't pay taxes on the inflated value of their car for the next two years. The order will amount to about $340 million in reduced vehicle property taxes, he said.
“Kentuckians will pay a similar amount that they did last year,” the governor said at a news conference.
To help Kentuckians combat rising prices due to inflation brought on by the global pandemic, 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.Read more: https://t.co/dw7V6El1kn pic.twitter.com/h9EYJdW6pu
— Governor Andy Beshear (@GovAndyBeshear) February 16, 2022
Under the order, Kentuckians who already paid their vehicle property taxes this year will receive refunds for the increased amounts, Beshear said.
The Kentucky House passed a bill recently to give tax relief to vehicle owners. That measure is awaiting action in the Senate. Republicans have supermajorities in both chambers.
Also Wednesday, Beshear announced he's working with House Democratic Caucus Whip Angie Hatton, D-Whitesburg, to file legislation aimed at cutting the state's sales ax from 6% to 5% for a 12-month period beginning July 1. The effort, aimed at combating historic nationwide inflation, would save Kentuckians, $873 million, according to Beshear's office.
“Our families don’t need this type of 'reform.' They need relief,” Beshear said in a news release. “So, if we are going to alter our tax structure, let’s do it to address the current inflation and in a way that will help our families. Let’s do it in a way that will make things cost less for all Kentuckians.”
Some Republican legislators are unsure of the plan, saying the proposal to cut the state sales tax hasn't been discussed with Republican leaders.
“He didn't do that, and so that shows everything you need to know about this plan," said Rep. Jason Nemes (R-Louisville). "It's complete, unadulterated political nonsense."
“The governor comes up with a sales tax. That's nice to hear that," added Rep. Ken Fleming (R-Louisville). "But, you know, he's got to really have more methodical approach to that and not talking to us and not working this through, this is typical what he does."
Beshear says with the state entering 2022 with about $1.9 billion dollars more than budgeted, this change can be made with some adjustments to his recommended budget to accommodate the revenue reduction.
But, without seeing the numbers, some republicans aren’t so sure.
"I would like to know where he’s gonna come with the money, in terms of how are you going to make up over $1 billion going from six to five," Fleming said. "That's that's really concerning.”
America’s current inflation woes stem from the COVID-19 pandemic. Supply chains for computer chips, clothes, furniture and other goods are under stress. At the same time, consumer demand has surged after a historical amount of government aid flowed into the economy.
The two steps would deliver about $1.2 billion in combined tax relief, the Democratic governor said.
Related Stories:
- Kentucky House votes to give relief on vehicle tax bills
- Jefferson County PVA launches online portal to appeal vehicle tax assessments
- Rising value of vehicles may lead to property tax increase in Kentucky
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