top of page

Gov. Beshear Provides Vehicle Property Tax Relief and Proposes Temporary Cut in State Sales Tax

Gov. Beshear Provides Vehicle Property Tax Relief and Proposes Temporary Cut in State Sales Tax

Kentuckians would see around $1.2 billion in tax savings


FRANKFORT, Ky. (Feb. 16, 2022) – 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.

Under the Governor’s proposal, Kentuckians would see tax relief of approximately $1.2 billion, of which $873 million is directly related to sales tax savings and $340 million is from the reduction in vehicle property taxes.

“A booming economy and the best state budget in 25 years means we can do more to help our working families and small businesses buy and sell the essential goods and services that are costing more and that are simply priced too high,” Gov. Beshear said. “We have all had enough – and today I am doing something about it by providing immediate vehicle property tax relief and proposing a cut in the sales tax.”


Gov. Beshear Provides Vehicle Property Tax Relief The Governor signed an executive order that will stop an increase in vehicle property taxes caused by soaring used car values, which in Kentucky rose approximately 40% since last year.

The property valuation for the average motor vehicle in Kentucky rose from $8,006 to $11,162 in just one year. The Governor said the abrupt adjustment warrants a change and under his order, for example, a Kentuckian will pay a tax amount similar to last year – if they own the same vehicle in the same condition and are living in the same county – and they will not pay taxes on the inflated value for the next two years.

The Governor said those who have already paid their 2022 taxes do not need to worry – they will be getting a refund from their local county clerk’s office. According to Kentucky state law, only the General Assembly can exempt all or any portion of the property tax applied to motor vehicles. For the first time, in Senate Joint Resolution 99 (R.S. 2022), the Kentucky Senate stated that the Governor has the authority to provide vehicle property tax relief, and in response, Gov. Beshear has acted quickly.


Gov. Beshear Wants Sales Tax Cut The Governor also is working with Kentucky House Democratic Caucus Whip Angie Hatton of Whitesburg, who is filing legislation to support cutting the state sales tax from 6% to 5% from July 1, 2022, through June 30, 2023.

The sales tax proposal decreases sales tax costs for all Kentucky families by more than 16%, as the U.S. inflation rate is 7.5%, on purchases at retailers, restaurants and items at grocery stores that are not food or medicine, because those items are already tax-free. Building and hardware materials and clothing purchases will also benefit from the sales tax reduction.

This historic step would help families until the high U.S. annual inflation rate retreats, which is projected to be through 2022 and into 2023.

The Governor will propose adjustments to his recommended budget to accommodate the reduction in revenues.

The Governor also cautioned against those in Frankfort who are using evasive terms like “comprehensive tax reform.” He said these groups only want to do one thing: raise the sales tax on our hard-working families and, likely, apply it to critical items like food and medicine. In return, they would lower income tax rates on the most profitable corporations and our most economically fortunate Kentuckians.

“Our families don’t need this type of ‘reform.’ They need relief,” <