What is U-Drive-It?
U-Drive-It (UDI) is an alternative method for the payment of Usage Tax as prescribed by KRS 138.460
. UDI allows for deferment of this tax at the time of registration. Payment will be made based on rental and lease receipts generated by use of the vehicle. The laws governing the UDI program are found in KRS 138.463
and are supplemented by the following four administrative regulations:
Other regulations concerning U-Drive-It:
Proper accounting systems to record all usage of the vehicles licensed under UDI are a must. The taxpayer should be able to account for all use of the vehicle and revenue generated from its operation on Kentucky highways.
Items to Note:
- Tax payments to the Transportation Cabinet for vehicles rented or leased under this program are the DIRECT obligation of the taxpayer 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 vehicle being rented or leased.
- 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.
Record keeping, audits, and all other information - KYTC - Road Fund Audits: (502) 564-6760
Registration, applications and permits - KYTC - Vehicle Registration: (502) 564-6401 Email: