Request By:
Mr. Michael A. Hendricks
Jefferson County Assistant Attorney
1129 Kentucky Home Life Building
Louisville, Kentucky 40202
Opinion
Opinion By: Robert F. Stephens, Attorney General; By William S. Riley, Assistant Attorney General
In your recent letter it is stated that in December 1977 James I. Foley, the previous delinquent tax collector, placed liens on vehicle registration records of the Jefferson County Clerk. The liens were actually recorded on the clerk's computer files. When the owner registered his motor vehicle for 1978 the lien was noted on the registration certificate. In view of the staggered registrations for motor vehicles it is possible to place liens on the clerk's computer files which do not appear on the registration certificates for several months.
For example, assume a lien is recorded in the clerk's computer files after the owner has registered the vehicle for 1979. Later in the year the owner could trade the vehicle to a dealer who relies on the lack of lien notation on the registration certificate. When the dealer attempts to change ownership the lien will show up on the clerk's computer files. The clerk refuses to transfer the vehicle. Can transfer of ownership of a motor vehicle be precluded in accordance with KRS 186.230(9) when the clerk's computer files have been appropriately marked but the certificate of registration contains no evidence of a lien? KRS 186.230(9) reads as follows:
"No person shall be permitted to sell, trade or transfer ownership of a motor vehicle if evidence is presented to the county clerk that any lien exists on the motor vehicle. "
This provision must be read in connection with KRS 186.045, covering financing statement affecting vehicles filing time, fees, and notations showing security interests. Subsection (2)(a) requires that whenever a financing statement required by KRS Chapter 355 relating to any vehicle registered or required to be registered in Kentucky for use on the highway is presented to a county clerk for filing, the clerk shall immediately note information required by the department relative thereto on the owners copy of the certificate of registration. The clerk shall also note such information on the clerk's copy of the certificate of registration and ownership or transfer receipt maintained in his office in numerical order.
Upon examination of the above statute, it would appear that in order for the transfer of a motor vehicle to be precluded, the information must actually appear on the certificate of registration of the motor vehicle. The fact that it may be on the computer files in the clerk's office is not sufficient.
KRS 134.420(1) grants the Commonwealth a lien on property. When a taxpayer wants to transfer ownership on a motor vehicle Mr. Foley would not release the lien on the vehicle until taxes for all years on all vehicles were paid. Does a lien attach to all of the personal property owned by a taxpayer?
KRS 134.420(1) states in part that the state and each county, city or other taxing district shall have a lien on the property assessed for taxes due them respectively for five years following the date when the taxes become delinquent, and also on any real property owned by a delinquent taxpayer at the date when the sheriff offers the tax claims for sale. In Commonwealth v. Walker, 25 KLR 2122, 80 S.W. 185 (1904) the Court said:
"It has been a settled legislative policy in Kentucky to give a lien on all the property of the taxpayer in his entire list for all his taxes, and not a lien on each piece of property for the tax on it alone."
If all the vehicles appeared on one tax bill, it is apparent that the ruling of the Court is applicable. All the property would be liable for the tax due on any one particular vehicle.