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 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.
UDI APPLICATION CHECKLIST:
Please be sure to follow all the steps (and upload all forms) online to complete your application. Failure to produce the proper documents listed will result in a delay in processing your request.
1. Complete the application online.
2. Upload your State’s Certificate of Good Standing if your business is outside of Kentucky.
3. Upload your Certificate to do Business in Kentucky (Also called Certificate of Authorization; Existence or Authority). You can obtain a copy of this from the Secretary of State's website, www.sos.ky.gov.
- From there you type in the name of your company
- Once on your company page, go to the certificate tab; you will see a list of certificates your company has.
- Click on the certificate you need, and it will walk you through the payment process where you can download your certificate.
4. Insurance Document
- Please upload your Certificate of Insurance. If your insurance carrier is registered in Kentucky, they can use this
link, they just need to put in the notes that this is for a UDI application. The insurance must outline and have a least the minimum of:
- Death of Injury to Any One Person - $100,000.00
- Death of Injury to Any Two Persons - $300,000.00
- Property Damage - $50,000.00
- 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 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.
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 udi.dmc@ky.gov to have their inventories updated.
FAQs
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.
There are two U-Drive-It fees. The first fee is the fee when you first register your vehicle at the clerk’s office under the U-Drive-It program. It is based on the month of incorporation for the leasing company and the month you register the vehicle. The second fee is the renewal fee every year. The renewal fee is $15.00.
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.