Many states assess a personal property tax on certain items of personal property such as motor vehicles, boats, and aircraft. Business personal property taxes—taxes on tangible personal property items that are used to produce income—are often referred to as ad valorem taxes.
In Kentucky, personal property tax is applicable to certain items of personal property, which includes motor vehicles, boats, and aircraft. This tax is assessed annually based on the fair cash value of the property as of January 1st of each year. The tax is considered an ad valorem tax, meaning it is based on the value of the item. Business personal property that is used to produce income is also subject to this tax. Tangible personal property owned by businesses, such as machinery, equipment, and fixtures, must be reported to the Property Valuation Administrator (PVA) in the county where the property is located. Tax rates vary by locality and are set by local taxing jurisdictions, including state, county, and city governments. It is important for individuals and businesses to report and pay these taxes to avoid penalties and interest for late payment.