Temporary Tags: Additional Rules
We recently covered temporary tags and metal plates. There are a few additional rules to remember regarding dealers temporary tags:
- The vehicle is not required to have current inspection.
- They may be used to tow a vehicle to and from the auction.
- They may only be used on the type of vehicles the dealer is licensed to sell.
- Do not use these tags for personal use.
- Keep the tag receipt in the glove box in case the tag comes off the bumper.
Buyer’s Temporary Tags
The other type of tag generated by the eTAG system is the buyer’s temporary tag. These tags will be issued on every retail sale of a vehicle designed for on-road use.
You will collect the $5 buyer’s tag fee and submit it to the county at the time of title transfer with each retail transaction.
A vehicle riding on a buyer’s temporary tag requires current inspection and will need that inspection in order to be registered. The buyer’s tag is good for up to 60 days and the customer should keep the receipt in the vehicle until their metal plates are mounted.
Temporary Tags Allotment
How many of these temporary tags will you be eligible for?
As a new dealer you will have the ability to issue up to 300 of each tag type annually. When you renew your license your tag allotment will be based on your annual sales, industry growth, and years in business.
What if you need more tags?
Once you have used 50% of your allotment, TxDMV allows you to ask for additional tags. Keep in mind you will be required to provide supporting information with your request.
Internet Down Tags
At some point the webDEALER system may become unavailable due to system maintenance or internet outage. If you sell a car at this time, you will need to use an Internet Down tag. These tags are to be pre-printed and stored for just this situation. You will complete the receipt forms by hand, giving one to the customer and keeping one for the deal jacket. You MUST enter the transaction into eTAGs within 24 hours of the system becoming available.
If you do not, you will not be able to replenish your internet-down tag supply. That would be bad, because at some point when the system becomes unavailable in the future, you may not have any tags available.
Your internet down tags must be kept in a secure locked place. And if they’re lost or stolen, you must report that fact to the agency. These tags expire 12 months after they are printed, and like all other temporary tags, they are valid for 60 days once issued to the customer.
You can preprint either 30 tags or one week’s worth of total annual sales, whichever is the greater amount. As mentioned previously, when the tags expire or they are used, be sure to download new ones.
The last tag we will discuss is a 30-day permit. Now, if your buyer’s tag is going to expire, you DO NOT want to issue an additional buyer’s tag. That is a violation! What you do need to do is acquire a 30-day permit.
You may obtain such a permit at the county tax office or a TxDMV Regional Service Center. It’s currently $25 and there is a $4.75 processing and handling fee, and you have to provide the buyer’s proof of liability insurance. Interestingly, this tag goes in the back window of the vehicle. All other types of dealer-issued tags are required to be displayed in the rear license plate holder.
Confusing Time Periods
Now, with regard to all these tags, there are some confusing time periods.
As we mentioned, the buyer’s tag can be issued for up to 60 days.
However, that has no effect on your obligation to transfer title. You must transfer the title into the name of the buyer within 30 calendar days. To repeat, even though the buyer’s tag may still be good, you are still obligated to transfer title in 30 days.
Failure to transfer a title within 30 days may be a $10,000 penalty! It is one of the biggest and most costly mistakes dealers make.
An exception is made for seller financed sales. A seller financed, or buy-here pay-here dealer, who is deferring their sales tax, actually has 45 days to transfer the vehicle.
We will discuss this in more detail in the next section.
No matter how you acquire your vehicles, when you do acquire them, you must remove the plates and the registration stickers from vehicles that you offer for sale in your inventory.
When you take a vehicle in trade from a customer, that customer’s plates may be transferred to the new vehicle he purchased, as long as the plates were removed from a passenger vehicle 6,000 lbs. or less or a truck 10,000 lbs. or less, and the plates are going on the same vehicle type, or given back to the owner if he requests them. Specialty license plates may also be transferred to a newly purchased vehicle.
If the owner does not want the old plates, you MUST render them unusable and dispose of them. This means drawing a large “X” on the face of each plate with indelible marker or punching a hole in them or ripping them in half. Whatever you need to do to make sure that those plates can’t be used in the commission of a crime. After defacing the license plates, you can dispose of them by delivering the defaced plates to an aluminum recycling center. Many County and TxDMV Regional Centers will also accept the defaced plates.