Kentucky Car Sales Tax Calculator – Fast, Free & Accurate

What is Kentucky’s Car Sales Tax (Usage Tax)?

In Kentucky, when you buy a car—whether new or used—you’re charged a 6% usage tax. Unlike some other states that base sales tax strictly on the purchase price, Kentucky uses a slightly different system:

• The tax is based on the greater value between the car’s purchase price or its NADA trade-in value.
• You can deduct any trade-in allowance (the value of the car you’re trading in) from that amount.
• The result is your taxable amount, and 6% of that figure is what you’ll owe.

This rule prevents underreporting of car values and ensures the state collects a fair tax.

How the Kentucky Car Sales Tax Calculator Works

Our Kentucky Motor Vehicle Usage Tax Calculator is designed to mimic exactly how the state calculates your tax. Here’s the breakdown:

1. Enter the Vehicle Price – This is the purchase price you’re paying for the car.
2. Enter the NADA Trade-In Value – The official NADA (National Automobile Dealers Association) value of the car, which the state uses as a benchmark.
3. Enter Trade-In Allowance – If you’re trading in your old car, the allowance you receive will be deducted from the taxable amount.
4. Click Calculate – The calculator compares the price vs. NADA value, subtracts your trade-in, and then applies the 6% tax rate.

Example:

• Vehicle Price: $30,000
• NADA Value: $31,000
• Trade-In Allowance: $8,000

Tax Base = $31,000 (the higher of the two values)
Taxable Amount = $31,000 – $8,000 = $23,000
Usage Tax = $23,000 × 6% = $1,380

That’s the amount you’d owe in tax at the time of registration.

Why Use a Kentucky Car Sales Tax Calculator?

A calculator isn’t just a neat tool—it’s a real money-management helper. Here’s why:

• No surprises at the DMV – You’ll know exactly what to budget for.
• Better trade-in decisions – See how your trade-in lowers your tax bill.
• Compare buying scenarios – Test different prices, values, or trade-ins before finalizing your deal.
• Plan financing smarter – If you’re rolling tax into your auto loan, you can calculate your total upfront.

Tips for Car Buyers in Kentucky

• Always check the NADA value: Even if you get a “deal” on the purchase price, the state could tax you on the higher NADA value.
• Use your trade-in wisely: The more value you get from your trade-in, the less tax you’ll owe.
• Don’t forget other fees: Title, registration, and local county fees are separate from usage tax.
• Plan for big purchases: On a $40,000 car with no trade-in, the usage tax alone is $2,400.