Fiscal Court passes first reading of new vehicle rental tax

Published 8:35 pm Wednesday, December 20, 2023

The Fiscal Court passed the first reading of a new Motor Vehicle Licensing Fee Ordinance at their meeting on Dec. 11.

The court voted to pursue starting this new tax on rental services at a meeting on Oct. 24. The tax will collect a license fee of 3% of gross rental charges from rental agreements of 30 days or less by U-Drive-It, peer-to-peer sharing programs, transportation network companies, and other vehicle renting companies.

The first reading of the ordinance passed with four yes votes, and Magistrate Paula Bodner was the only no vote. Magistrate Jason Cullen was not in attendance at the meeting. If the second reading passes, the tax will go into effect July 1, 2024.

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The recently-passed Kentucky House Bill 8 lowers the state income tax year-over-year while allowing other taxes to be started. It allows counties to tax a broader range of vehicle renting / sharing companies than previously permitted.

County Attorney Chris Herron said the license fees will be required to be paid to the county on a monthly basis. Tax administration will collect the fee, and the money collected must go toward economic development. The Fiscal Court will get a 3% collection fee on the tax.

Herron explained that only three counties in northern Kentucky have enacted this tax so far, which are all near Cincinnati with a major airport. He said rental companies will likely charge customers for the tax.

Herron said at the Oct. 24 meeting that Boyle County does not have very many ride-sharing services or rental services available. He said the county might not get much money from the tax until the county grows, and more rental services come in.

Cullen said at the Oct. 24 meeting that it would be better to have the tax in place sooner than later to prepare for future growth. Bodner said she believes the county doesn’t need to have the tax in place yet, and is concerned the tax might discourage county residents from using rental services in the future.

“I’m not feeling this adding a new tax; it’s just going to affect a very small number of people right now,” Bodner said.

The county will place all funds collected in a separate account of the county called the Motor Vehicle License Fee Account. All proceeds of the fee shall be used by TRI-ED for economic development activities only.

Specifics of the ordinance

The license fee is levied in the amount of 3% of the gross rental charges from rental agreements for periods of 30 days or less by a U-Drive-It, or peer-to peer car sharing programs; or the provision of transportation network company services by a transportation network company.

The license fee shall not apply to any person operating under a U-Drive-It certificate who  receives less than 75% of their gross revenues generated in the county from gross rental charges.

• The fee shall be collected by a:

a. Motor vehicle renting company from the renters of the motor vehicle;

b. U-Drive-It from the renters of the motor vehicle;

c. Peer-to-peer sharing program from the shared vehicle driver; and

d. Transportation network company from the purchaser of the transportation network company services.

Fees shall be paid to the county from where the rental originated on a monthly basis. All vehicle renting companies, U-Drive-It, peer-to-peer car sharing programs, and transportation network companies must keep records including a determination of the amount of fees owed; and a determination that exemptions were properly allowed.

• Exemptions

Revenues from vehicle rentals shall not be included in the gross rental charges if:

(1) The declared gross weight of the motor vehicle exceed 11,000 pounds; or

(2) The rental is part of the services provided by a funeral director for a funeral.

• Failure to pay, and interest charges:

Unless waived by the Judge Executive, any retailer who fails to remit and pay the license fees shall be charged a penalty of 5% if the delay is not more than one month, with an additional 5% for each additional month or fraction thereof. But it will not go over 25% of the unpaid license fees, and interest shall be payable on all license fees and penalties that remain unpaid at a rate equal to the tax interest rate from the date such amounts were due until the date paid.

In other business:

• The court approved an agreement with the Boyle County Property Valuation Administrator. The PVA will share their GIS portal and data with the county, for an annual fee not to exceed $5,000, as partial reimbursement for the office’s annual costs.

County Administrator Julie Wagner explained that the PVA has a subscription with the state to access geographic information systems (GIS). This includes the use of Pictometry Imagery, and gives more details on things like parcel boundaries. But other agencies of the county cannot get access to GIS because they’re not a subscriber.

The court agreed that the county has a need to utilize imagery data and software in furtherance of its duties, particularly by law enforcement, the building inspector, Public Works, Animal Control, and administrative departments. The agreement with the PVA will not exceed $5,000 for a period of three years.

• Magistrate Steve Sleeper presented new names to be added to the county’s new homelessness task force. The court approved adding Jordan Burchfield, Ashley Dowell, Stacie Ford, Sue Andres, Tonya Buchanan, and Gina Evergreen to the task force. They will join eight other members of the task force, which will have their first meeting in January.

• The next Fiscal Court meeting has been moved to Thursday, December 21 at 9 a.m.