Kentucky Car Sales Tax

The vehicle sales tax in Kentucky is 6% on all car sales, and there are no additional sales taxes by city or county. Learn more here.
Written by Jacqulyn Graber
Reviewed by Jessica Barrett
The state of Kentucky imposes a 6% sales tax rate on all car sales, and there are no additional sales taxes imposed by individual cities or counties. 
You’ve probably seen them before—the giant price tags that dealers place in vehicles’ front windows to lure potential buyers. And while these sticker prices can seem attractive, it’s important to remember that your final cost will be a bit higher.
This is, in part, because the Kentucky state sales tax will be added to your purchase. The Bluegrass state has a statewide sales tax of 6% and individual cities or counties do not oppose additional taxes. 
However, understanding how taxes work can still be a bit confusing! To help out,
car insurance
super app
Jerry
has compiled a guide to Kentucky sales tax so you can car shop with confidence. 
We'll even show you how to save on your
Kentucky car insurance costs
along the way
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How much is the car sales tax rate in Kentucky?

Kentucky applies a 6% sales tax to all car sales, whether the car you’re purchasing is brand new or used. Fortunately, where you are in Kentucky doesn’t really matter since individual counties or cities do not charge their own additional taxes. 

How are car trade-ins taxed in Kentucky? 

When you purchase a vehicle, you’ll have the option to
trade in an old vehicle
and apply its value to the purchase price. For example, if your old car’s trade-in value is established at $5,000, you’ll knock that amount off of the bottom line of your bill!
Fortunately, trade-ins aren’t taxed in Kentucky. This means that the tax rate will only be assigned to the final price of your new vehicle after your trade-in credit is deducted. 
Note that for used vehicles, the final price cannot be less than half the difference between the trade-in value of the vehicle offered for registration and the trade-in value of the other vehicle offered in the trade.

How to calculate sales tax on a car in Kentucky

Since Kentucky sales tax is simply 6% of the total purchase price, estimating your sales tax is simple. Of course, you can also
use this handy sales tax calculator
to confirm your calculations. 
Key Takeaway No matter where you shop for a car in Kentucky, your sales tax rate will be 6% of your total purchase price. 

Exemptions from Kentucky car sales tax

Kentucky charges sales tax—also known as vehicle usage tax—every time the vehicle’s ownership is transferred. This happens when you purchase a new or used car from a dealership, as well as when an individual owner sells their vehicle to another individual.
That said, there are a few exemptions where sales tax will be waived. These can vary by county and usually require proper documentation, but may include instances when:
  • The buyer is a charitable/education organization
  • The buyer is a corporation/subsidiary (LLC) 
  • The dealer is applying for registration 
  • The buyer qualifies for military exemption 
  • The car is for the state, local, or US government
  • The car is being transferred as a result of a court order or will
  • The owner of the vehicle undergoes a name change
  • The car is repossessed 
  • A husband sells to his wife or vice versa
  • A parent sells to their child or vice versa
  • A grandparent sells to their grandchild or vice versa
  • A stepparent sells to their stepchild or vice versa

How to estimate Kentucky tax, title, and registration fees

In addition to sales tax, there will be other fees that drive up the purchase price of your new vehicle. These include registration fees, title fees, plate transfer fees, and documentation fees.
Here’s an estimation of the additional fees that will be added to your purchase price when car shopping in Kentucky:
Fee
Estimated cost
Sales tax
6% of purchase price
Registration fee
$21
Title fee
$9
Plate transfer
$2
Documentation fee
$315
Make auto loan refinancing easy with PriceProtect™
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MORE: Kentucky electric vehicle incentives

How to find affordable car insurance in Kentucky

After purchasing a car in Kentucky and paying all of your fees, there’s still one major expense left: purchasing a car insurance policy. Fortunately, the car insurance super app
Jerry
makes it easy to find the best rates on your
car insurance
policy.
Simply download Jerry’s mobile app and enter in your information, and in less than a minute you’ll get customized car insurance quotes from brand name insurance providers. Once you pick a policy, Jerry will finalize your new plan and even help cancel your old one.
Jerry
was helpful every step of the way. They saved me over $100 a month for insurance in Kentucky.” —Jim F.
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FAQ

The sales tax on all cars—brand new or used—is 6% in Kentucky. There are no additional taxes charged by individual cities or counties.
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