Request By:
Mr. Joseph B. Murphy
Assistant County Attorney
302 First Federal Plaza
Vine & Upper Streets
Lexington, Kentucky 40507
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
Your recent letter concerns OAG 81-233. Your question is whether the opinion means that if property is exempt from taxation under KRS 139.310 (use tax) it is also exempt from the motor vehicle usage tax provided in KRS 138.460.
At this point we must keep in mind the language of KRS 186.192(1):
"(1) The county clerk shall not transfer the registration of any motor vehicle or vehicle as defined in KRS 186.650 unless evidence is presented in such form as the department of transportation may prescribe that all excise taxes imposed on the sale, transfer or use of the motor vehicle or vehicles have been paid. In any case where the transferor or transferee is a dealer as defined in KRS 190.010, no proof of payment of such taxes is required."
In other words, the county clerk's transferring the registration of any motor vehicle is specifically conditioned on the presenting of evidence, in such form as the department may prescribe, that "all excise taxes imposed on the sale, transfer or use of the motor vehicle or vehicles have been paid." (Emphasis added). The statute adds that "In any case where the transferor or transferee is a dealer as defined in KRS 190.010, no proof of payment of such taxes is required."
In OAG 81-233 a sole proprietor of a non-retail business sold his business to another, to be operated as a sole proprietorship. Involved in that sale were numerous office items, equipment and motor vehicles. A five percent (5%) use or excise tax is provided in KRS 139.310 on the storage, use or other consumption of tangible personal property purchased on and after April 1, 1968, for storage, use or other consumption in Kentucky at the rate of five percent (5%) of the sales price of the property. The use tax is levied upon the transfer of the property presumably for its use, storage or consumption within
Kentucky. Commonwealth ex rel. Luckett v. City of Elizabethtown, Ky., 435 S.W.2d 78 (1968). It is a tax upon the right to use the property, an excise tax. The use or excise tax must be collected by the "retailer" from the consumer. See KRS 139.340, and
Marcum v. City of Louisville Housing Com'n, Ky., 374 S.W.2d 865 (1964). However, KRS 139.070 and 139.470(4) exempt "occasional sales". The excise tax, where applicable, must be paid before the county clerk can transfer the registration of any motor vehicle. KRS 186.192, as we said above.
In OAG 81-233 we ruled that KRS 139.470(4), expressly exempts the payment of the subject five percent (5%) use or excise tax if the transfer of the motor vehicles involved an "occasional sale", as defined by KRS 139.070. The term "occasional sale" in the latter statute was interpreted in
Commonwealth Ex Rel. Luckett v. Revday Indus., Inc., Ky., 432 S.W.2d 819 (1968) 820, as meaning the sale by a seller who is not in the regular business of selling goods, i.e., tangible personal property. Under the facts given in OAG 81-233, we concluded that the subject sale was a one-sale, or going-out-of-business sale, and thus, as an "occasional sale", the motor venicles were exempt from the tax of KRS 139.310.
Now returning to your question as to whether OAG 81-233 embraces KRS 139.310 as well as KRS 138.460.
The immediate answer is that in OAG 81-233 we did not consider or deal with KRS 138.460. However, you suggest that the "occasional seller" in OAG 81-233 would have to pay the motor vehicle usage tax imposed by KRS 138.460.
We have carefully examined KRS 138.470, relating to exemptions from the motor vehicle usage tax of KRS 138.460. We are unable to find any exemption comparable to the "occasional sale" exemption found in KRS 139.470(4).
Therefore, it is our opinion that the automobiles sold by the person going out of business, as dealt with factually in OAG 81-233, are subject to the motor vehicle usage tax of KRS 138.460. As you suggest, the tax of KRS 139.310 and 138.460 are two different taxes, although highly similar in incidence and operative effect.