Request By:
Mr. Winston E. King
Assistant Director of Law
City of Louisville
Louisville, Kentucky 40202
Opinion
Opinion By: Steven L. Beshear, Attorney General; By Alex W. Rose, Assistant Attorney General
In your letter you have asked whether the City of Louisville should collect sales tax on the sale at auction of unclaimed vehicles sold for towing and storage costs from its impoundment lot.
KRS 139.200 imposes a sales tax on the gross receipts of retailers for the privilege of making retail sales. KRS 139.050 defines "gross receipts" as not including:
"(3)(f) The sales price of any motor vehicle as defined by KRS 138.450(2) which is registered for use on the public highways and upon which any applicable tax levied under KRS 138.460 has been paid; or, the sales price of vehicles defined under KRS 189.010(11) and 189.010(16)."
Since the motor vehicle usage tax set forth in KRS 138.460 is paid by the purchaser, the sales tax does not apply to unclaimed vehicles sold at auction for towing and storage costs.