An Official Website of the Commonwealth of Kentucky
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.
601 KAR 1:140
601 KAR 1:146
601 KAR 1:147
Sections 1 and 3
601 KAR 9:045
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 user of the vehicle. 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 void or damaged rental agreement.
Loaner vehicles are NOT under the U-Drive-It program. Please contact the
Department of Revenue at 502-564-4455.
TC 95-16 Application for U-Drive-It available in Forms Library
TC 95-309 U-Drive-It Renewal Application available in Forms Library
The U-Drive-It permit holder or the agents should first explain the U-Drive-It program to their customers and how it relates to paying the usage tax for the state of Kentucky.
Need to provide the U-Drive-It number to their agents, dealerships and customers.
Permit holders should complete paperwork for title and registration and include the U-Drive-It number on the paperwork.
The U-Drive-It permit holder will receive a pre-printed monthly usage tax report along with bills for any vehicles that have been renewed or added to the program.
When vehicles need to be deleted from the U-Drive-It program, the permit holders or their agents/ dealerships need to send a request to the UDI office at firstname.lastname@example.org to have their inventories updated.