Request By:
Mr. Michael R. Moloney
Geralds, Moloney & Jones
Second Floor
Old Northern Bank Building
259 West Short Street
Lexington, Kentucky 40507
Opinion
Opinion By: Steven L. Beshear, Attorney General; By Alex W. Rose, Assistant Attorney General
In your letter to the Attorney General you ask whether taxes are due on a vehicle transferred to an insurance company when the vehicle is stolen from the insured and not recovered and the transfer is for the purpose of completing an insurance claim transaction. We assume you are referring to the ad valorem property tax on personal property.
There is no statutory procedure for dealing with this situation. Logic would state that when an automobile is stolen and not recovered, the owner does not have the benefits of ownership and thus the vehicle has ostensibly no value to him. Furthermore, § 172 of the Kentucky Constitution also demands this same conclusion. There it states that "all property . . . shall be assessed for taxation at its fair cash value, estimated at the price it would bring at a fair voluntary sale . . . ." A stolen car would have no value under this provision.
It is, therefore, our opinion that a stolen automobile that has not been recovered should not be subject to ad valorem property tax until it is recovered. This should be accomplished by bringing proof that the vehicle was stolen to either the Property Valuation Administrator or the County Clerk. The proof should consist of a police report or other official document indicating the car was stolen.