U-Drive-It is an alternative method for paying Usage Tax as prescribed by
KRS 138.460. Proper accounting systems to record all usage of the vehicles licensed under UDI are a must. The permit holder should be able to account for all vehicle use and revenue generated from its operation on Kentucky highways.
LAWS GOVERNING THE UDI PROGRAM
ITEMS TO NOTE:
Tax payments to the Transportation Cabinet for vehicles rented or leased under this program are the DIRECT obligation of the permit holder who registers the vehicle. The tax due may be passed on to the vehicle's user. Any tax-exempt status of the renter or lessee is not applied to the permit holder.
All transactions will be taxed at the Fair Market Value (FMV) of the rented or leased vehicle.
Taxpayers should retain every voided or damaged rental agreement.
Loaner vehicles are NOT under the U-Drive-It program. Please contact the
Department of Revenue at 502-564-4455.
UDI APPLICATION CHECKLIST:
Please be sure to follow all the steps (and upload all forms) online to complete your application. Failure to produce the required documents will delay processing your request.
1. Complete the application online at apps.transportation.ky.gov.
2. Upload your State’s Certificate of Good Standing if your business is outside of Kentucky.
3. Upload your Certificate to do Business in KY (If you are out-of-state). If you are in-state, make sure your Secretary of State is in good standing, as it will be reviewed.
4. Insurance Document
- Please Upload your Insurance (Form-E or Accord Form). If your insurance carrier is registered in KY, the carrier can visit www.tylerinsurancefilings.com to upload and add the note "For UDI Application.” The insurance must outline and have at least the minimum of:
- Death or Injury to Any One Person for vehicles under 18,000 lbs. - $100,000
Death or Injury to Persons for Vehicles 18,000 lbs. or less – $300,000
Death or Injury to Persons for Vehicles more than 18,000 lbs. - $600,000
Property Damage - $50,000
5. Pay the $250 application fee.
If you have any questions about the application process, please feel free to contact us by phone at 502-564-1257 or by email at
udi.dmc@ky.gov.
KENTUCKY UDI PERMIT HOLDER'S RESPONSIBILITY TO THEIR CUSTOMERS:
The U-Drive-It permit holder or the agent should first explain the U-Drive-It program to their customers and how it relates to paying the Kentucky usage tax.
Provide the U-Drive-It number to their agents, dealerships, and customers.
Permit holders should complete the paperwork for title and registration and include the U-Drive-It number on it.
When vehicles need to be deleted from the U-Drive-It program, permit holders or their agents/dealerships must send a request to the UDI office at udi.dmc@ky.gov to have their inventories updated.
FAQs
Once a UDI vehicle lease is over, please send a removal request to udi.dmc@ky.gov with the documentation outlined in the user manual. The four types of documents we accept are :
1. Bill of Sale
2. Transfer title
3. Out of State title
4. Auction Slip
A common example of an Exempted Vehicle is a vehicle weighing 44,001 lbs. or more. Tax-exempt vehicles must meet the specific qualifications set forth in KRS 138.470. Exempted vehicles still need to be under a UDI account, but a zero can be remitted monthly for the vehicle.
There are two U-Drive-It fees.
- The second fee is based on the month you register the vehicle, which is no more than $15 per vehicle.
No. They are excluded from inspection under
KRS186A.115 (5) part C. Motor Vehicles operated by a motor carrier under a non-negotiable certificate or permit issued by the Department of Vehicle Regulation.
This would be part of your contract. The leasing company is responsible to the state of Kentucky, however, they have a right to pass it on to their customers.
Leasing companies are the permit holders and should give you a permit number for the DMV office in the county where you reside, to register and title vehicles.
It is a four digit number assigned to the leasing company or rental company to pay usage tax on lease or rental vehicle on a month to month basis to the Department of Transportation Division of Motor Carriers.
Leasing or rental companies that lease or rent vehicles to customers in the state of Kentucky.
The U-Drive-It number is assigned to the leasing or rental company through the Transportation Cabinet Division of Motor Carriers after application has been approved. The lessee needs to contact their leasing company to get the UD Number.
Vehicles in the U-Drive-It program generate usage tax, not sales tax.