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138.463 Collection of U-Drive-It tax.
(1)
(2)
(3)
(4)
(5)
(6)
A holder of a permit as required under KRS 281.615 to operate as a U-Drive-It
as defined in KRS 281.014 may pay the usage tax as provided in KRS 138.460
or, subject to the provisions of this section, may pay a usage tax of six percent
(6%) levied upon the amount of the gross rental or lease charges paid by a
customer or lessee renting or leasing a motor vehicle from such holder of the
permit.
The provisions of KRS 138.462 and this section shall apply to all rental and
leasehold contracts entered into after March 9, 1990.
A holder of a permit shall pay the usage tax as provided in KRS 138.460
unless he shows to the satisfaction of the cabinet that he is regularly engaged
in the renting or leasing of motor vehicles to retail customers as a part of an
established business. The issuance of a U-Drive-It permit under the provisions
of KRS Chapter 281 shall create a rebuttable presumption that the holder of a
permit is regularly engaged in renting or leasing. Persons first engaging in the
renting or leasing of motor vehicles to retail customers shall, in addition to
obtaining a permit required under KRS 281.615, demonstrate to the
satisfaction of the cabinet that they are prepared to qualify under the standards
set forth in this subsection.
In the event the holder of such permit qualifies under subsection (3) of this
section and elects to pay the usage tax by the alternate method as provided in
subsection (1) of this section, or is required by subsection (8) of this section to
pay by the alternate method, he shall pay the seat tax imposed by KRS
186.281(3) and in addition shall pay the monthly tax authorized by subsection
(1) of this section.
The tax authorized by subsection (1) of this section shall be the direct
obligation of the holder of the permit but it may be charged to and collected
from the customer in addition to the rental or lease charges. The tax due shall
be remitted to the cabinet each month on forms and pursuant to regulations
promulgated by the cabinet.
(a) As soon as practicable after each return is received, the cabinet shall
examine and audit it. If the amount of tax computed by the cabinet is
greater than the amount returned by the taxpayer, the excess shall be
assessed by the cabinet within four (4) years from the date the return was
filed, except as provided in paragraph (c) of this subsection, and except
that in the case of a failure to file a return or of a fraudulent return the
excess may be assessed at any time. A notice of such assessment shall
be mailed to the taxpayer. The time herein provided may be extended by
agreement between the taxpayer and the cabinet.
(b) For the purpose of paragraphs (a) and (c) of this subsection, a return filed
before the last day prescribed by law for the filing thereof shall be
considered as filed on such last day.
(c) Notwithstanding the four (4) year time limitation of paragraph (a) of this
subsection, in the case of a return where the tax computed by the cabinet
is greater by twenty-five percent (25%) or more than the amount returned
by the taxpayer, the excess shall be assessed by the cabinet within six (6)
years from the date the return was filed.
(7)
(8)
(9)
Failure of the holder of the permit to remit the taxes applicable to the rental
charges as provided herein shall be sufficient cause for the Department of
Vehicle Regulation to void the permit issued to such holder and the usage tax
on each of the motor vehicles which had been registered by the holder under
the permit shall be due and payable on the retail price of each such motor
vehicle when it was first purchased by the holder.
Notwithstanding the provisions of KRS 138.460 and subsection (1) of this
section, a holder of a permit operating a fleet of rental passenger cars which
has been registered pursuant to an allocation formula approved by the cabinet
shall pay the tax by the method provided in this section. The provisions of this
section shall apply to all vehicles rented by the holder in this state.
The usage tax reported and paid on every rental or lease of a vehicle
registered pursuant to this section shall be based on the fair market rental or
lease value of the vehicle. Fair market rental or lease value shall be based on
standards established by administrative regulation promulgated by the cabinet.
The cabinet may remove a vehicle from the U-Drive-It program without a
hearing if it is determined by the cabinet that no taxes have been remitted on
that vehicle during the registration period. However, the tax reported and paid
to the Transportation Cabinet shall not be less than the amount due based on
the actual terms of a rental or lease agreement. The burden of proving that the
consideration charged by the holder satisfies this subsection is on the holder.
Effective:July 15, 1998
History: Amended 1998 Ky. Acts ch. 166, sec. 4, effective July 15, 1998. -Amended 1996 Ky. Acts ch. 55, sec. 1, effective July 15, 1996. -- Amended
1990 Ky. Acts ch. 466, sec. 5, effective July 13, 1990; and ch. 476, Pt. VII B,
sec. 627, effective July 1, 1990. -- Amended 1988 Ky. Acts ch. 113, sec. 1,
effective July 15, 1988. -- Amended 1986 Ky. Acts ch. 431, sec. 4, effective
January 1, 1987. -- Amended 1982 Ky. Acts ch. 387, sec. 3, effective July 15,
1982. -- Amended 1974 Ky. Acts ch. 74, Art. IV, sec. 20(2). -- Created 1972 Ky.
Acts ch. 184, sec. 2.
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