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Abstract

The Kentucky Transportation Cabinet’s (KYTC) Department of Vehicle Regulation (DVR) administers numerous fees and taxes. Many administered by the two divisions in DVR — Motor Vehicle Licensing (DMVL) and Motor Carriers (DMC) — have remained unchanged for many years despite salary increases, the adoption of more complex and expensive technologies, and inflation raising administrative costs. This report provides in-depth assessments of 10 fees and taxes (selected by division administrators). Six are administered by DMVL — certificate of title, duplicate title, vehicle title history report, additional registration fee, reflectorized license plate fund, and trailer registrations — and four are managed by DMC, including International Fuel Tax Agreement (IFTA) registration/decals, Kentucky Intrastate Tax (KIT) registration/decals, the Kentucky Highway Usage Tax (KYU), and Kentucky Intrastate for Hire. Based on state budget data, reports from the Kentucky Automated Vehicle Information System (KAVIS), and data from other states in the Southeast, researchers recommend modifying each of the 10 fees analyzed. The report provides detailed justifications for doing so. A nationwide survey of transportation agencies found that changes in fees and taxes are typically enacted through the legislative process, but that relevant subject-matter experts rarely have the opportunity to provide input when legislation is drafted. Most states do not track how much it costs to administer fees and taxes, weakening their ability to determine if fees are sufficient to finance the provision of services. However, many have compared their fees and taxes to those charged by other states. Kentucky’s DVR will benefit by reviewing and updating fees and taxes regularly and developing an inventory of all fees and taxes it administers so it has better knowledge of what resources are necessary to coordinate administration. KYTC should also elicit the participation of DVR administrators when changes in fees or taxes are contemplated by legislators.

Report Date

3-2026

Report Number

KTC-26-25

Digital Object Identifier

https://doi.org/10.13023/ktc.rr.2026.25

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