Information About Temporary Tags in Texas

Statement from Whitney Brewster – Executive Director, Texas Department of Motor Vehicles

December 1, 2021

The Texas Department of Motor Vehicles (TxDMV) recognizes the harmful impacts of the fraudulent use of temporary tags, not only in Texas but across the nation. Addressing this issue involves multiple parties working together: TxDMV, law enforcement, the motor vehicle industry, and state and local leadership.

As a state agency, TxDMV is responsible for implementing laws passed by the legislature. Recognizing the limited authority TxDMV had to proactively and quickly address the misuse of the temporary tag system by dealers who are committing fraud, the TxDMV Board recommended changes to the law for the legislature’s consideration.

House Bill 3927, passed during the 87th Legislative Session (2021), gives TxDMV new authority to deny a dealer or converter access to the temporary tag database and to establish the maximum number of temporary tags a dealer or converter may obtain in a calendar year. Prior to HB 3927, TxDMV was specifically prohibited by statute from denying a licensed dealer or converter access to the database. The department’s only recourse to stop dealers who were fraudulently obtaining temporary tags was license revocation, an administrative process that can take months or years to complete, all the while leaving the dealer or converter with access to the temporary tag database to continue the fraudulent activity.

HB 3927 removed the statutory prohibition and authorizes TxDMV to deny a dealer’s or converter’s access to the temporary tag database if TxDMV determines a dealer of converter is fraudulently obtaining temporary tags. The dealer or converter may appeal the department’s determination, but during the appeal process, the dealer or converter is no longer able to engage in the fraudulent activity.

While denial of access is a powerful tool to stop those who are misusing the system and fraudulently issuing temporary tags, it is reactive and addresses only additional fraudulent activity. To prevent fraudulent activity from the outset, the legislature authorized TxDMV to establish the maximum number of temporary tags a dealer or converter may obtain in a calendar year. Establishing a maximum number of temporary tags allows a dealer or converter to conduct legitimate business but eliminates the ability to issue an unlimited number of temporary tags and provides a hard stop to fraudulent activity.

Valuable input and expertise from law enforcement, the motor vehicle industry and other stakeholders helped shape the proposed rules that TxDMV must adopt in order to implement the new law. The required public comment period for these proposed rules is currently in progress. I urge law enforcement, the motor vehicle industry and anyone else interested to read the proposed rules and submit comments by 5 p.m. on December 13, 2021: https://www.txdmv.gov/general-counsel/proposed-and-adopted-rules.

The Texas Department of Motor Vehicles will continue to work with law enforcement, the motor vehicle industry, and state and local leadership on additional safeguards to prevent misuse of temporary tags.

Temporary Tags Q&A

What are temporary tags? Are all paper license plates the same?

Temporary tags, which may also be called temp tags, paper tags, or paper license plates, are issued to vehicle buyers to serve as temporary registration until the dealer completes the title and registration process, or to dealers for use during demonstrations, vehicle transfers, or on loaner cars. The temporary tags most often seen on Texas roadways are those issued to vehicle buyers. Learn more about the different types of tags issued by dealers and their uses: www.TxDMV.gov/dealers/webdealer/webdealer-101.

The Texas Department of Motor Vehicles also issues 30-day permits for the temporary movement of a vehicle subject to Texas registration law. These permits are not temporary tags and may only be obtained in person at the office a local tax assessor-collector or at a TxDMV Regional Service Center. Learn more about the types of temporary permits available in Texas: www.TxDMV.gov/motorists/register-your-vehicle/temporary-permits.

What is TxDMV doing to address the misuse of temporary tags?

The Texas Department of Motor Vehicles Board requested the legislature to provide TxDMV with the authority to combat misuse and fraud in the issuance of temporary tags issued by motor vehicle dealers and converters.

With additional input from law enforcement, motor vehicle dealers, and the industry, the legislature responded with House Bill 3927, which passed during the 87th Legislative Session (2021). The authority provided in HB 3927 include authorizing TxDMV to deny a dealer or converter access to the temporary tag database and to establish the maximum number of temporary tags a dealer or converter may obtain in a calendar year, eliminating the ability to issue an unlimited number of temporary tags and providing a hard stop when a dealer or converter is engaging in fraudulent activity.

Why has it taken so long for TxDMV to address this problem?

Prior to House Bill 3927, TxDMV was specifically prohibited by statute from denying a licensed dealer or converter access to the database. The department’s only recourse to stop dealers that were fraudulently obtaining temporary tags was license revocation, an administrative process that can take months or years to complete, all the while leaving the dealer or converter with access to the temporary tag database to continue the fraudulent activity.

HB 3927, which passed during the 87th Legislative Session (2021), removed the statutory prohibition and authorized TxDMV to deny a dealer’s or converter’s access to the temporary tag database if TxDMV determines a dealer or converter fraudulently obtained temporary tags. The dealer or converter may appeal the department’s determination, but during the appeal process, the dealer or converter is no longer able to engage in fraudulent activity.

To implement HB 3927, TxDMV must adopt rules. A rule is a description of how an agency will carry out a law, including the necessary processes and procedures to enact the statute. Because rules have a public impact, they are subject to notice and public comment, both written and at a public hearing.

As part of the required rulemaking process for state agencies, the proposed rules were published for public notice in the Texas Register on November 12, 2021. Public comment on the proposals were due by 5 p.m. CST on December 13, 2021. The Texas Department of Motor Vehicles Board will consider the rules during an upcoming public meeting..

Why is TxDMV unable to enforce applicable laws about the misuse of temporary tags?

As an administrative agency, TxDMV is not authorized by the legislature to enforce the criminal laws of the State of Texas. The Texas Department of Motor Vehicles does not have arrest authority or the ability to prosecute a bad actor. When TxDMV encounters criminal activity, we alert law enforcement to take the appropriate action against the bad actor. Arrest and/or prosecution is at the discretion of the investigating law enforcement agency or prosecutor.

With respect to the misuse of temporary tags, a dealer producing, reproducing, or selling temporary tags would be violating Section 503.067 of the Texas Transportation Code. By violating Section 503.067, the dealer could be committing anything from a Class C misdemeanor to a state jail felony. In addition, the dealer would be subject to administrative civil monetary penalties and revocation of their license.

In addition, the person who purchases such a temporary tag and operates a vehicle displaying that temporary tag is committing a Class C misdemeanor or a state jail felony depending on the circumstances.

If the bad actor is a licensee of the agency, TxDMV can initiate an administrative enforcement action against that actor to assess civil monetary penalties or even revoke their license. Administrative cases are heard before the State Office of Administrative Hearings and the TxDMV Board hands down the ultimate decision in each case that goes before it.

How is TxDMV working with law enforcement on issues related to temporary tags?

When TxDMV receives a complaint about the sale of temporary tags by a licensee, the complaint is designated as a high priority and is assigned to an investigator. If the complaint is substantiated, the investigator submits the case to a supervisor for review, and then the case goes to an attorney. The attorney is alerted to the fact that the case is high priority and involves the sale of temporary tags.

The Texas Department of Motor Vehicles makes every effort to engage law enforcement to initiate a criminal investigation of substantiated complaints. If a law enforcement agency accepts the case, TxDMV sends the law enforcement agency a referral with all the evidence gathered from its administrative investigation. The department continues to provide support to law enforcement by providing technical assistance for the interpretation of rules and laws, analysis of evidence, and answering questions concerning substantiated violations.

The Texas Department of Motor Vehicles also provides law enforcement with training about temporary tags, including the proper use of temporary tags and how to identify counterfeit temporary tags.

Has TxDMV made any system improvements to address the misuse of temporary tags?

The Texas Department of Motor Vehicles deployed an enhancement to the Registration and Title System (RTS) that allows Texas Law Enforcement Telecommunications System (TLETS) users to view dealer name and DBA, dealer license number, and dealer address when they query tags. TLETS users, who are primarily law enforcement officers, may also query temporary permits by Vehicle Identification Number (VIN), and can view the status of a temporary tag and will know if the tag is active, expired, or voided. The RTS enhancement helps officers more easily determine the legitimacy of a temporary tag during a traffic stop or investigation and was added based on meetings TxDMV has had with law enforcement regarding enhancements to help combat tag fraud. Learn more about improvements to the temporary tag system: Timeline of Dealer and Other Timed Permits (PDF)

How do motorists with a legitimate need for temporary tags go about obtaining them?

Only the dealer from whom you purchased a motor vehicle can lawfully give you a Texas Buyer’s Temporary Tag. In addition, that dealer must hold an active license, also referred to as a general distinguishing number, from TxDMV.

If you see an advertisement on social media or a marketplace or marketplace app for temporary tags, the seller is committing a crime, and if you purchase one of those tags and operate a motor vehicle with it, you may be committing a crime as well.

If you purchased a vehicle from a dealer and the temporary tag on that vehicle is expiring, but the dealer has not transferred the title to you, you may ask the dealer to purchase a 30-day permit for you to continue to legally operate your vehicle. You may also purchase a 30-day permit from your local tax office or TxDMV Regional Service Center yourself. If you find yourself in this situation, please consider filing a complaint at www.TxDMV.gov/complaints. Texas Department of Motor Vehicles staff may be able to assist you in obtaining your title from the dealer or to get reimbursement from the dealer for the cost of 30-day permits.

How do dealers with a legitimate need for temporary tags go about obtaining them?

Licensed motor vehicle dealers and converters are provided access to the webDEALER eTAG system once issued a license with the department. eTAG is the department’s web-based system for dealers and converters to obtain and issue temporary tags, while making the temporary tag information available in almost real-time to law enforcement.

HB 3927 authorizes the department to set maximum temporary tag limits a dealer and converter are allowed to issue through rulemaking, while ensuring they can continue to conduct business. These limits will be programmed into the eTAG system and will alert both the dealer and the department of the number of tags printed towards a dealer’s maximum limit. Once maximum limits on temporary tag allocations are in place, a dealer or converter may request an increase in the number of temporary tags by submitting a request and providing evidence in the department's eLICENSING system for consideration. Learn more about the eLICENSING system: www.TxDMV.gov/dealers/licensing/elicensing-resources.

How can I tell if a temporary tag is legitimate?

The Texas Department of Motor Vehicles has made substantial efforts to increase the security of tags issued through its system. eTAG currently generates tags in Adobe PDF format. Security features were added to all temporary tags in an effort to reduce the ability to illegally copy, alter, or counterfeit tags and to improve the ability to identify fraudulent and altered tags. Learn more about improvements to the temporary tag system: Timeline of Dealer and Other Timed Permits (PDF)

Security features include a bar code specific to the vehicle, a state seal watermark, security lines, and sequences specific to temporary permits.

What can I do to report the misuse of temporary tags?

If you suspect a licensed dealer is misusing temporary tags, you are encouraged to report the dealer via the TxDMV Online Complaint Portal at www.TxDMV.gov/complaints.

As TxDMV is not a law enforcement organization, if you suspect a temporary tag is being used for criminal activity, please be mindful of your personal safety and report the activity to your local law enforcement agency.

How are dealers licensed in Texas?

The TxDMV Motor Vehicle Division (MVD) issues licenses to used vehicle dealers, franchised motor vehicle dealers, salvage vehicle dealers, vehicle leasing companies, manufacturers, distributors, converters, and vehicle transit operators.

Department licensing staff processes more than 18,500 license applications per year. This includes applications for new licenses, applications to amend existing licenses, and applications to renew licenses.

License applications are submitted via eLICENSING, the department’s online licensing management system, and are assigned to an MVD licensing specialist for processing. The licensing specialist reviews the file in detail and completes a variety of identity, affiliation and location checks to identify possible issues. Learn more about the dealer licensing process: Dealer Licensing Process Overview.

What kind of background checks are performed on those applying for a dealer license?

Under Texas law, applicants for new and renewal licenses undergo a criminal history review as part of determining eligibility (or fitness) for licensure. As a result, applicants are required to provide information about all crimes resulting in convictions or deferred adjudications regardless of when the crimes occurred and applications are subject to a criminal history background check. The Licensing Section of MVD reviews applicants’ criminal history before issuing or renewing a license and before amending a license due to changes in ownership or management.

TxDMV may deny applications or revoke existing licenses when applicants’ criminal history indicates that applicants or their representatives should not be licensed.

Detailed information about the criminal history review process is available at https://www.txdmv.gov/dealers/criminal-history-review-process