Can a Tennessee car dealer use a vehicle with dealer plates to run a paid bus shuttle service?

Subject

Opinion No. 12-108, Motor Vehicle Dealer Registration Plates, December 14, 2012

Plain-English summary

Senator Johnson asked two questions about how Tennessee dealers and their customers can use vehicles bearing dealer registration plates. The questioner described a specific scenario: a dealer runs a business that both sells motor vehicles and runs a paid bus transport service using buses in the dealer's fleet. When transport demand outruns the regular fleet, the dealer pulls a bus or other vehicle from inventory (with dealer plates) and uses it in the transport business.

Question 1: Are there restrictions on how dealers and customers may use vehicles with dealer plates?

Yes. Tennessee's motor vehicle registration laws require every vehicle on a public highway to be registered and titled, with limited exceptions (Tenn. Code Ann. § 55-3-101(a)). One exception is vehicles bearing a dealer registration plate (§ 55-4-101(a)(1)). The use of dealer plates is controlled by § 55-4-221:

• § 55-4-221(b)(1): Dealers, their authorized agents, or employees may operate a dealer-owned vehicle with dealer plates on public highways without registering it. The implicit purpose is allowing operation while the vehicle is in inventory for sale (e.g., demo drives, moving inventory between lots, driving to/from auctions).

• § 55-4-221(b)(1) also lets the dealer authorize a customer to use a vehicle with dealer plates "for temporary purposes not to exceed twenty-four (24) hours." This covers loaner cars for test drives, courtesy vehicles for customers whose cars are being serviced, etc.

• § 55-4-221(b)(6): "This section shall not apply to work or service vehicles owned by a manufacturer, transporter or dealer." This is the killer for the paid-transport scenario. If the dealer uses a vehicle as a "work vehicle" in its own business (the paid transport service), the dealer cannot use dealer plates on it.

"Work vehicle" isn't statutorily defined. The AG used Black's Law Dictionary's definition of "work" ("physical and mental exertion to attain an end, especially as controlled by and for the benefit of an employer") to read § 55-4-221(b)(6) as excluding any vehicle owned by a dealer and used (even temporarily) in the dealer's own work or business. The exclusion is absolute. Compare with § 55-4-221(b)(1)'s explicit temporary-use carve-out for customers; the legislature included that exception in (b)(1) but didn't include a temporary-work-vehicle exception in (b)(6). State v. Casper supplies the canon: when the legislature includes specific language in one section but omits it in another, the omission is purposeful.

So once a motor vehicle is used directly in the dealer's work or business (even temporarily), it loses dealer-plate eligibility. It must be registered and titled under § 55-3-101(a) like any other vehicle. State v. White and Eastman Chem. Co. v. Johnson confirm the plain-meaning rule.

Question 2: Is there a restriction on charging fees for vehicles with dealer plates?

No. § 55-4-221(b) doesn't prohibit charging a fee for temporary uses authorized by the statute. The AG specifically noted that a dealer could properly charge a customer a fee for the temporary use authorized by § 55-4-221(b)(1) (up to 24 hours).

The opinion's answer to question 1 effectively pretermits question 2 in the specific scenario: if the dealer uses the vehicle in its own paid-transport business, the vehicle loses dealer-plate eligibility, so the fee discussion never matters. But the AG answered question 2 anyway, presumably for other contexts (loaner-car rentals, etc.).

Currency note

This opinion was issued in 2012. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Background and statutory framework

The general registration rule

Tennessee requires every vehicle on a public highway to be registered and titled (§ 55-3-101(a)). Defined exceptions exist; § 55-4-101(a)(1) carves out vehicles bearing dealer registration plates.

How dealer plates work

§ 55-4-221 controls issuance and use of dealer registration plates:

• (a) Dealer-category plates may be issued to manufacturers, dealers, and transporters of motor vehicles.
• (b)(1) Dealers may operate vehicles on highways without registering each one, displaying a special-purpose plate. Customers may use such a vehicle for temporary purposes up to 24 hours.
• (b)(2) The plate displays "TENN" at top, "auto dealer" at bottom, plus "D" and 5 numbers. Used-car dealers get red background/white letters; new-car franchise dealers get white background/black letters.
• (b)(3) A dealer with a valid motor vehicle commission number can apply for plates. First plate is $47.30; additional plates are $23.65 each. Maximum 225 plates per dealer per registration year.
• (b)(6) Section doesn't apply to work or service vehicles owned by a manufacturer, transporter, or dealer.

The tension between (b)(1) and (b)(6)

§ 55-4-221(b)(1) authorizes a dealer to operate vehicles with dealer plates on public highways. § 55-4-221(b)(6) excludes "work or service vehicles" from dealer-plate eligibility. The AG read these together: (b)(1) authorizes operation while the vehicle is in dealer inventory for sale-related purposes. (b)(6) cuts off that authorization once the vehicle is used in the dealer's own work or business.

Why "work vehicle" includes the paid transport bus

The term isn't defined in the statute. State v. Meeks and State v. Edmondson direct courts to use dictionary definitions for undefined statutory terms. Black's Law Dictionary defines "work" as "physical and mental exertion to attain an end, especially as controlled by and for the benefit of an employer." A vehicle used in a dealer's paid transport business is being used for the dealer's work or business, so it falls under (b)(6).

Why temporary use doesn't save it

§ 55-4-221(b)(1) created a 24-hour temporary-use exception for CUSTOMERS. (b)(6) has no temporary-use exception for the DEALER's work. State v. Casper supplies the canon: the legislature's inclusion of specific language in one section but omission in another is purposeful. The temporary-use exception in (b)(1) doesn't carry over to (b)(6).

What's left for the dealer

If the dealer wants to use buses in its paid transport business, the buses must be registered and titled normally under § 55-3-101(a), like any other commercial vehicle. Dealer plates are reserved for inventory and customer-loaner uses.

Fees are permitted for authorized uses

§ 55-4-221(b) doesn't prohibit fees. A dealer can charge a customer for the 24-hour temporary use authorized by (b)(1). The AG didn't elaborate further; presumably ordinary contract law and consumer protection rules apply to whatever the dealer charges.

Common questions

Can a dealer use a vehicle with dealer plates to drive employees to lunch?
That's a hairy line. If "lunch transportation" is integrated into the dealer's business operation (e.g., shuttling employees during a working lunch meeting), it arguably becomes "work or service" use. If it's incidental personal use during an inventory-related task (the salesperson grabs lunch while picking up a vehicle from auction), it's closer to authorized inventory operation. The AG's bright line is "directly used to support a work or business venture." Edge cases require fact-specific analysis.

A customer is test-driving the car for 48 hours. Is that still a "temporary purpose" within § 55-4-221(b)(1)?
No. The statute caps customer use at 24 hours. Past that, the vehicle either needs to be registered normally, or use of dealer plates is unauthorized.

Can a dealer rent dealer-plated cars to customers as a side business?
A rental business is the dealer's "work or business." Under (b)(6), the rental vehicles can't use dealer plates. The dealer would need to register them normally.

Does this affect manufacturer plates differently?
§ 55-4-221(a) applies to manufacturers, dealers, and transporters. The (b)(6) work-vehicle exclusion applies to all three. So manufacturers are also barred from using manufacturer plates on work vehicles in their own operations.

What's the penalty for misusing dealer plates?
The opinion doesn't address penalties. They are generally found elsewhere in Title 55 (registration violations, tax evasion if dealer plates are used to dodge registration fees, etc.).

Citations

Statutes:
- Tenn. Code Ann. §§ 55-4-101 to -603 (motor vehicle registration generally)
- Tenn. Code Ann. § 55-4-101(a)(1) (dealer plate exception to registration)
- Tenn. Code Ann. § 55-3-101(a) (general registration requirement)
- Tenn. Code Ann. § 55-4-221 (dealer plate provisions)
- § 55-4-221(a) (who may get dealer plates)
- § 55-4-221(b)(1) (dealer use, customer 24-hour temporary use)
- § 55-4-221(b)(2) (plate design)
- § 55-4-221(b)(3) (fees, maximum)
- § 55-4-221(b)(6) (work/service vehicle exclusion)

Cases:
- State v. Meeks, 262 S.W.3d 710 (Tenn. 2009)
- State v. Edmondson, 231 S.W.3d 925 (Tenn. 2007)
- State v. Casper, 297 S.W.3d 676 (Tenn. 2009)
- State v. White, 362 S.W.3d 559 (Tenn. 2012)
- Eastman Chem. Co. v. Johnson, 151 S.W.3d 503 (Tenn. 2004)

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2012/op12-108.pdf

Original opinion text

S T A T E O F T E N N E S S E E
OFFICE OF THE
ATTORNEY GENERAL
PO BOX 20207
NASHVILLE, TENNESSEE 37202

December 14, 2012

Opinion No. 12-108

Motor Vehicle Dealer Registration Plates

QUESTIONS

1. Are there any restrictions on how dealers and their customers may use vehicles for which dealer registration plates have been issued under Tenn. Code Ann. § 55-4-221(b)?

2. Are dealers or their customers restricted from charging a fee for the use of vehicles for which dealer registration plates have been issued under Tenn. Code Ann. § 55-4-221(b)?

OPINIONS

1. Yes. Pursuant to Tenn. Code Ann. § 55-4-221(b)(1) and (6), a dealer, or a dealer's employee or duly authorized agent, may operate a dealer-owned vehicle with dealer registration plates upon public highways except where the vehicle is used for "work or service." Furthermore, a dealer may authorize the operation by customers of a vehicle for which dealer registration plates have been issued but only for temporary purposes not to exceed 24 hours.

2. No.

ANALYSIS

This request concerns the proper application of Tennessee's motor vehicle registration laws, codified at Tenn. Code Ann. §§ 55-4-101 to -603. The requestor has advised this Office that a motor vehicle dealer operates a business that not only sells motor vehicles but also transports persons for a fee using its fleet of buses owned by the dealer. Occasionally the demands of the transport business exceed the dealer's available fleet, and to meet the demand the dealer will temporarily utilize in its transport business a bus or other motor vehicle for which a dealer registration plate has been issued pursuant to Tenn. Code Ann. § 55-4-221(b). The questions have arisen whether use of such a bus or other motor vehicle is authorized under Tenn. Code Ann. § 55-4-221(b) and, if so, whether a fee can be charged for that use.

1. Every motor vehicle driven or moved upon a Tennessee highway is required to comply with Tennessee's registration and certificate of title laws, with certain defined exceptions. Tenn. Code Ann. § 55-3-101(a). One of those exceptions is for vehicles bearing a dealer registration plate under Tenn. Code Ann. § 55-4-101(a)(1). The issuance and use of dealer registration plates are controlled by Tenn. Code Ann. § 55-4-221, which provides in relevant part:

(a) Registration plates issued under the dealer category may be issued to manufacturers, dealers and transporters of motor vehicles as provided for in this part.

(b)(1) Any dealer owning any vehicle that may be legally operated upon the streets or highways of this state with a regular vehicle registration may, either in person or through a duly authorized agent or employee, operate or move the vehicle upon any highway of the state without registering each such vehicle, upon condition that the vehicle display a special purpose plate issued to that owner as prescribed in this part. The dealer may further authorize the operation of the vehicle bearing such plates by customers for temporary purposes not to exceed twenty-four (24) hours.

(2) The special purpose dealer plate shall have the legend "TENN" at the top of the plate and shall have "auto dealer" at the bottom of the plate. The legend shall contain the letter "D" and five (5) numbers. The special purpose dealer plate for a motor vehicle dealer that sells used motor vehicles shall have a red background and white letter and numbers. The special purpose dealer plate for a franchise motor vehicle dealer that sells new motor vehicles shall have a white background and black letter and numbers.

(3) Any dealer who has a valid number assigned by the motor vehicle commission may make application to the department for one (1) or more special purpose plates. The fee for the first plate is forty-seven dollars and thirty cents ($47.30), and the fee for any plates in addition to the first plate is twenty-three dollars and sixty-five cents ($23.65) for each additional plate. No dealer shall be permitted to purchase more than two hundred twenty-five (225) auto dealer plates during a registration year.

. . . .

(6) This section shall not apply to work or service vehicles owned by a manufacturer, transporter or dealer.

This statute by its plain language imposes certain conditions and restrictions on the issuance and use of dealer registration plates. Tenn Code Ann. § 55-4-221(b)(1) allows a dealer, or a dealer's employee or duly authorized agent, to operate a vehicle with dealer registration plates upon public highways, thereby apparently recognizing such operation on public highways may be necessary while the vehicle is held for sale in the dealer's inventory. Tenn. Code Ann. § 55-4-221(b)(1) states that a dealer may allow a customer to use a vehicle with a dealer registration plate only "for temporary purposes not to exceed twenty-four (24) hours." Tenn. Code Ann. § 55-4-221(b)(6), however, expressly excludes any "work or service vehicles" owned by a dealer from eligibility for issuance of a dealer registration plate.

There admittedly is some tension between Tenn. Code Ann. § 55-4-221(b)(1), which permits a dealer to operate a vehicle with dealer registration plates upon public highways, and Tenn. Code Ann. § 55-4-221(b)(6), which prohibits a dealer from using a vehicle with dealer registration plates as a "work or service vehicle." The term "work vehicle" is not defined, and in such cases courts will look to dictionary definitions, including those found in Black's Law Dictionary, to ascertain the meaning of undefined statutory terms. See State v. Meeks, 262 S.W.3d 710, 719-20 (Tenn. 2009); State v. Edmondson, 231 S.W.3d 925, 927-28 (Tenn. 2007). Black's Law Dictionary defines "work" as "[p]hysical and mental exertion to attain an end, esp. [especially] as controlled by and for the benefit of an employer." Black's Law Dictionary 1635 (8th ed. 2004) (emphasis added). In light of this definition of work, the more persuasive interpretation is that Tenn. Code Ann. § 55-4-221(b)(6) would exclude any vehicle owned by a dealer that is used even on a temporary basis in the dealer's "work," or business, from eligibility for dealer registration plates. This exclusion is absolute and contains no exceptions, such as an exception for a vehicle temporarily used in the dealer's work or business. This provision stands in contrast to the exception allowed for a dealer's customer to use a vehicle with a dealer registration plate for "temporary purposes not to exceed twenty-four (24) hours." Compare Tenn. Code Ann. § 55-4-221(b)(6) with Tenn. Code Ann. § 55-4-221(b)(1). See also State v. Casper, 297 S.W.3d 676, 693 (Tenn. 2009) (stating the general rule of statutory construction that where the General Assembly includes specific language in one section of an act but omits the same language in another section of the same act, it is presumed the General Assembly acted purposefully in excluding such language). Thus once a motor vehicle is used directly to support a work or business venture of a dealer even on a temporary basis, as opposed to being held as inventory for sale and used for purposes related to the dealer's business of offering the vehicle for sale, the vehicle loses its eligibility for a dealer registration plate and must be registered and titled under Tenn. Code Ann. § 55-3-101(a). See State v. White, 362 S.W.3d 559, 566 (Tenn. 2012) (quoting Eastman Chem. Co. v. Johnson, 151 S.W.3d 503, 507 (Tenn. 2004)) (stating the general rule that, where the language of a statute is clear, courts will apply its plain meaning without a forced interpretation that would limit or expand the statute's application).

2. While the response to question one likely pretermits question two, Tenn. Code Ann. § 55-4-221(b) contains no restriction on a dealer or a customer charging a fee for the use of vehicles that have dealer registration plates. For instance, a dealer could properly charge a customer a fee for the temporary use of such a vehicle authorized by Tenn. Code Ann. § 55-4-221(b)(1).

ROBERT E. COOPER, JR.
Attorney General and Reporter

WILLIAM E. YOUNG
Solicitor General

BRIAN RAMMING
Assistant Attorney General

Requested by:
The Honorable Jack Johnson
State Senator
301 6th Avenue North
Suite 11, Legislative Plaza
Nashville, TN 37243