Kentucky Used Car Sales Tax (2026): 6% Usage Tax, the Notarized Affidavit and Gift Rules

Kentucky taxes a used car with a 6% motor vehicle usage tax, paid to the county clerk when the title moves into your name. On a used car the tax is normally 6% of the price you and the seller swear to on a notarized affidavit, minus any trade-in, but Kentucky won't let that taxable price drop below half the book trade-in difference. Skip the affidavit and the clerk taxes the car at its average retail book value instead. As of Oct 19, 2026, that's the rule for dealer and private sales.

I read the Department of Revenue's usage tax page, its 2025 county clerk manual for the tax, the valuation regulation (103 KAR 44:060) and the Transportation Cabinet's titling page on Oct 19, 2026. Kentucky calls this a usage tax, not a sales tax, and that difference shows up in a few places, gifts especially. If you've bought cars in another state, don't assume the same rules apply.

The notarized affidavit is the whole game

The form is Revenue Form 71A100, the Affidavit of Total Consideration Given for a Motor Vehicle. The clerk manual says "notarized affidavit" means a dated affidavit signed by both buyer and seller, with each signature individually notarized. Revenue will accept the two signatures on separate documents as long as each is notarized. If the affidavit isn't there, the regulation says the taxable price is the average retail value in the prescribed NADA guide.

That matters on a cheap private sale. If you paid $3,000 for a car that books much higher at retail and you show up without the affidavit, you're taxed on the book value. The manual adds that a blank affidavit gets taxed at retail book, and if that's higher than what you paid, the manual says no refund is provided. Get it signed and notarized when you hand over the money, not a week later when the seller stops answering texts.

The 50% floor

Kentucky doesn't just take your word on price. The manual quotes KRS 138.450(16): the used car's taxable price is the total consideration, less the trade-in allowance, but not less than 50% of the difference between the book trade-in value of the car you're buying and the book trade-in value of anything you trade in. Its own formula is trade-in value of the purchased car minus trade-in value of your trade, divided by two.

• Say a car's book trade-in value is $12,000, you pay $4,000 and trade nothing. Half of $12,000 is $6,000, so tax is 6% of $6,000, or $360, not $240. That's my arithmetic using the manual's formula.
• The manual says the floor doesn't apply to vehicles on a branded title, like salvage or rebuilt.

So a "friends and family" price on a valuable car doesn't save as much as people hope. And look, if the price on the affidavit is way under the floor, ask yourself why the seller is dumping it.

Trade-ins

A trade-in has to be a motor vehicle to count, so a boat or a bulldozer doesn't. The manual says it must be presented at the time of purchase, a credit can't be added after the sale, and a car you sold before you bought the new one can't be used as a trade. The manual also says no statute limits how many vehicles you can trade.

Gifts and family transfers

This is the part that surprises people. A gift is still taxed. The manual says the taxable value of a gift is the average trade-in value from the reference manual, and its examples include a car inherited on an out-of-state title, one won in a raffle and one donated by a charity. What's exempt is a transfer between spouses, (step)parents and (step)children, and grandparents and grandchildren, under KRS 138.470(6). You claim it on the Multipurpose Form (71A101) with a notarized signature, everyone involved has to be a Kentucky resident, and it only works between living family members. Siblings aren't on that list. A car from a deceased relative goes through the will or court order rules instead.

Moving to Kentucky

For new residents the taxable value is the car's book trade-in value, or $100 for older cars no longer listed. You get credit for tax paid in your old state if that state taxes similarly and gives Kentucky the same credit. The manual's big exception is Georgia, which doesn't allow credit for other states' taxes, so Kentucky can't give credit to Georgia residents moving here with cars bought after March 1, 2013.

Deadline and paperwork

The Transportation Cabinet says a title sold between Kentucky residents must be transferred within 15 days. Take the signed-over title with notarized signatures, Kentucky insurance proof issued within 45 days, and your license or ID to your county clerk. A car coming from out of state also needs a sheriff's inspection. Our Kentucky private-sale title transfer guide covers the title side.

Check the title on NMVTIS before the notary appointment, and if it carries a brand, read our Kentucky salvage and rebuilt title rules. Our used car sales tax guide compares other states.

CarVins sells CARFAX and AutoCheck reports as a licensed reseller and isn't affiliated with CARFAX, AutoCheck or Experian. As of mid October 2026 a guest report cost about $5.50, members paid about $4.50 and the two-report bundle was about $6.75, while retail runs roughly $39.99 to $44.99. Confirm what you'll pay at checkout, because that's the number that sticks.

Sources

• Kentucky DOR: Motor Vehicle Usage Tax
• Kentucky DOR: Motor Vehicle Usage Tax clerk manual (2025)
• Form 71A100, Affidavit of Total Consideration
• 103 KAR 44:060, Motor vehicle usage tax valuation
• Kentucky Transportation Cabinet: Vehicle Titling
• NMVTIS