Tax and Financial Processing FAQs
Question
Answer
collapse Category : Audit - Tax and Financial Processing ‎(2)
Q: Are my records subject to audit?
A: Yes, Kentucky Revised Statute 138.680 states every licensee shall maintain complete records on all motor vehicles, by type, operating on Kentucky highways, weight and number of axles, mileage records and records of all purchases, use, and other dispositions of gasoline and special fuels. Such records, together with manifests of lading, invoices and other papers pertaining to gasoline or special fuels consumption, shall be retained for a period of five (5) years, and shall be made available to the Transportation Cabinet upon request for examination. If any licensee fails or refuses upon written request to furnish any information to the Transportation Cabinet concerning an audit, assessment, or verification of tax information, the cabinet may make an estimate of the licensee's tax due and issue an assessment against the licensee based upon the estimated tax due. Such assessment may be used by the cabinet in any legal proceeding for collection of the tax. The cabinet may at any subsequent proceeding require the taxpayer to file any reports or additional information it deems necessary.
Q: How are off-road miles reported?
A: Off-road miles are not taxable in Kentucky. The off-road miles should be included in the "total miles" but are removed when determining the "taxable miles" for required vehicles. Taxable miles are used when calculating the KYU weight distance tax return and off-road miles should be excluded. Off-road miles can be accounted for by reviewing the odometer readings from each vehicle. Information must be reported accurately. Calculations based on an estimation of off-road miles, such as a blanket percentage amount, is not acceptable.
collapse Category : Tax - Tax and Financial Processing ‎(8)
Q: Why do I get two (2) KY tax forms?
A: Kentucky has a fuel tax and a weight distance tax. Therefore, you must file an IFTA tax return (KIT if traveling only in Kentucky) with your base state and a Kentucky Weight-distance tax return with Kentucky.
Every motor carrier, excluding charter bus operators registered pursuant to KRS Chapter 281, shall pay a tax at the rate levied in KRS 138.220 (1) and (2) on the amount of gasoline and special fuels used in operations on the public highways of this state. Motor carriers shall pay for every motor vehicle operated upon the public highways of this state with a combined licensed weight in excess of fifty-nine thousand nine hundred and ninety-nine (59,999) pounds a KYU weight distance tax license is required. Those taxes levied under this section shall be computed and paid as provided in KRS 138.685 and 138.690. IFTA quarterly fuel tax returns are filed with a carriers’ base state. Kentucky based carriers can file their KIT/KYU/IFTA returns online. Carriers from other states or jurisdictions operating in Kentucky are only eligible to file their KYU weight distance tax returns online.
Q: I did not travel in KY Last quarter. Do I still need to file a KIT/KYU/IFTA tax return?
A: Yes, you must file a tax return even if you have no miles traveled in Kentucky during the specified quarter. Failure to file a return will result in cancellation of the license.
Q: Are there penalties & interest for late filing? How is it figured?
A: Yes, there are penalties & interest due for tax returns that are filed after the end of the month following each quarter end date. Once the tax amount owed has been determined, multiply that amount by the penalty rate indicated on the tax return. Interest rates can change on an annual basis. To determine the amount of interest owed you need to divide the annual interest rate by 12 and then multiply that number by the number of months the return is late. Next, you multiply that number by the tax amount due. Add the tax, penalty, and interest together for the total amount due. Any license holder who fails to file the required tax returns (under the provisions of KRS 138.660 to 138.7291) is subject to penalty and interest. If a KIT/KYU/IFTA license is cancelled due to failure to file a tax return or non-payment of taxes then a penalty of ($50) for a first offense, ($250) for a second offense, or ($500) for any subsequent offense within a (4) year period will be required. A cash or surety bond in the amount of ($1000-$50,000) is also required to reinstate a KIT/KYU/IFTA license.
Q: Why do I pay fuel tax at the pump and also pay on the KY (KIT/IFTA) Quarterly return?
A: Kentucky charges a surtax in addition to the fuel tax that is paid at the pump. Larger vehicles weighing 26,000 lbs and above or having three (3) or more axles must file a quarterly KIT/IFTA fuel tax return. This creates a two tier tax system where larger vehicles are taxed at a slightly higher fuel tax rate. The surtax rates are subject to change on a quarterly basis.
Q: I made a mistake on my KIT/KYU/IFTA tax return. What should I do?
A: You will need to file an amended return. Complete a new tax return as it should have been reported on the original return. You should also mark the "Amended Return" box. You can also contact The Division of Motor Carriers for assistance filing an amended return. The option to file amended returns and view previously filed returns online will be available in the near future. The IFTA Fuel Tax Return is available on the Tax Forms page. KIT and KYU tax forms are available upon request. KIT/KYU/IFTA tax forms will no longer be automatically mailed to carriers. You can also find FormTC 95-617 Amendment Questionnaire on the tax forms page. It should be submitted along with the return(s) being amended.
Q: I am out of business or no longer operating in Kentucky. What do I need to do?
A: You must notify the Division of Motor Carriers by submitting a written request for cancellation. Be sure to include the license number and contact information when making the request. You can also mark the "Ceased Operations" box when filing the final KIT/KYU/IFTA tax return. All taxes must be filed and paid before the license can be cancelled in good standing.
Q: How do I request a bond refund?
A: To be considered eligible for a cash bond refund you must file four consecutive quarterly tax returns timely (one calendar year). The request must be submitted in writing. Please include the license number and contact information when making the request.
Q: I’ve been charged twice, what do I need to do?
A: Submit proof of duplicate payment (bank statement). The request can be emailed to tax.dmc@ky.gov be sure to include the license number and contact info when making the request.