1.  A customer has a Maryland driver’s license, but is here on a VISA and is a resident of Nigeria.  Are they considered a Maryland resident and do we have to collect taxes?  They want to ship the car directly to Nigeria.  I called MVA and was told, “well, to go through Customs, they have to have the car titled in their name, so yes they have to pay taxes.”  This didn’t exactly answer my question because when I then called Customs, they said as long as the title is assigned to them and there is no lien, the front of the title does not have to be in their name.  So, are they a Maryland resident?  And do we have to collect tax?  Or are they a Nigerian resident, and since they are shipping the vehicle there, do they not have to pay tax?  Does a driver’s license establish residency or just the privilege to drive?

If they have a Maryland driver license or Maryland identification card, you are required to collect the taxes, which means the vehicle would have to be titled.  You are correct.  Customs will ship with an assigned CO or title.  From what you have explained, this person is a “citizen” of Nigeria, but he is residing in Maryland.  In order to obtain a Maryland driver’s License, this person was required to show proof of residence.  Therefore as a selling dealer, you are required to collect the taxes and submit the paperwork to the Motor Vehicle Administration within 30 days.

In the case of a sale to a non-resident, the dealer must have the customer complete the CS-006 and maintain copies of proof of out-of-state residence.   For your reference, I have attached copies of 11.113.1, 11-149, and 13-113. 

2.  A customer who just bought their used car got pulled over by the police and was told that the car was still registered to someone else and they should go to the MVA immediately and get it straightened out.  These tags were CVR’d and not finalized yet.  Shouldn’t law enforcement be aware of the time frames allowed in these situations?

The registration card is sufficient proof of registration.  However, if the customer did not provide the registration card, the officer would not have a way of knowing if the car was properly registered. 

Yes, law enforcement has been aware of this since the beginning of Electronic Registration and titling in this state back in 1994.  MVA corresponds on a regular basis with the State Police and other police agencies through meetings, emails and teletypes.  This concern has been forwarded to the State Police for their information.  MVA will send a reminder through tele-type to all police departments in the State. 

3.  What should happen when I find out, after (way after) the fact, that the wrong tag was put on a vehicle?  The usual scenario is; a customer gets a “red light” automated citation in the mail showing the tag number that is indicated on his registration, but the car in the picture is not the same model and/or color as his vehicle.  Upon closer examination, the customer sees that the tag on his car does not match his registration.  He comes to the dealership, we issue a substitute tag to him and then figure out where the tag that was on his vehicle really belongs.  Sometimes it belongs to another customer and sometimes it was voided in the CVR system.  The problem is finding out who has the tag that went through the red light.

You may contact the Vehicle Services Response Unit at 410-787-7886 for assistance in determining the correct vehicle owner.   They will follow-up to ensure that the correct vehicle owner is notified. 

4.  We received a Florida title from Alamo Rent a Car (showing an Oklahoma address, but we won’t even go there) that had been mis-assigned to another dealer.  Alamo left the assignment on the title wrong, the attached a Maryland Dealer’s Reassignment from Alamo to us, and wrote a letter that the Florida title should have been assigned to us.  Are we supposed to sign as buyer on the title where it was assigned to the other dealer?  Should they have skipped to the next assignment on the back of the title and assigned it to us?  Or should they have had the other (wrong) dealer that it was assigned to, assign it back to Alamo, and then they assign the title to us?  They refused to get the other dealer to sign, and then re-assign the title back tot hem, so we finally told them to get a duplicate Florida title.

The easiest way to handle this would have been for Alamo to get a duplicate title.  Remember that all titles bear the warning that alterations or erasures void the document.   If there was an error in assignment, the MVA will review the error and the accompanying certified statements from both the seller, and the person or company to whom the title was assigned in error.  Both statements must be on company letterhead, have the year, make, and VIN of the vehicle and fully explain the error and be signed by someone with the authority to sign for each company.  The MVA reserves the right to reject such transactions if it feels that the error was not adequately addressed.  It is important to remember that only one thin line be placed through the incorrect information.  If the information entered in error is illegible or totally blacked out, the transaction will definitely be rejected.  

Another concern with accepting altered documents is that you may later want to sell the vehicle at auction, or to a customer out of state and they may not accept those documents no matter how good the explanation is.  In that case, since you are a Maryland dealer, you may find the need to ask for a dealer resale title and if MVA finds the documents acceptable, you may still have to pay excise tax to Maryland unless the transaction is exempt under 13-810(a) 10, 11, 19, or 20 of Maryland Vehicle Law (refer to your manual page 20 and 21)   

5.  Please go over again how we should handle customers with insurance violations.  I believe we’re not supposed to deliver a car to a customer who has one.  But, unless we have tried to CVR the tags initially, how would we know there is a violation?  Once the customer has been put on a temp tag or a temporary (transfer) permit, and we discover, after the fact, that they have a violation, are we supposed to have the customer back in and take the tag off the car?

If you know that the customer has an Insurance Compliance flag, you may not knowingly issue permanent tags through ERT or issue temporary registration to that customer. 

If you unknowingly issued a temporary registration to a customer with an insurance violation, you need to notify the customer of the Insurance violation so that they may clear the violation.  If they do not take the steps needed to clear the flag, the temporary tags and/or registration need to be returned to your dealership. 

6.  How can MVA get a vehicle off their database when a customer traded a car years ago?  Customer is getting notices from Montgomery County that they could be liable for towing and impound fees (up to $300) for car that they traded to us in 2006.  We wholesaled the vehicle way back then.  The customer told the tow company that he has his bill of sale showing the trade and he also has his tag receipt showing the tags were turned in.  The tow company said they don’t care, that the customer was the last registered owner, and that’s who they will bill.  They didn’t even want to call us to find out who had possession of it.  Why should the county and/or tow company have access to this information, if they abuse this power?  Aren’t there privacy issues involved?

When a vehicle is found abandoned, the police department by law must notify the last registered owner and any lien holders on record. If the vehicle owner cannot be identified, a notice is posted in the courthouse in the county where the abandoned vehicle was found.  If the vehicle owners or lien holders do not respond in the required time, the vehicles are sold at public auction or turned over to a recycler on the form CS-078 (Certificate of Authority to Dispose of a Vehicle).  If the amount received through the sale of the vehicle is not sufficient to cover the cost of impoundment and storage costs, the last registered owner is responsible for the fees.  However, As long as the last registered owner in Maryland can show satisfactory proof of the vehicle’s disposition (who was it sold, junked, traded, gifted, donated, or repossessed), the jurisdiction will not hold the owner responsible.

Vehicle owners who do not pay the outstanding costs associated with their abandoned vehicle may have their other vehicles flagged with the abandoned vehicle flag.

Once the issue of all flags has been addressed, the customer may request to have that vehicle purged from MVA’s database.  However, the title record will be available on MVA’s DIWS system indefinitely.  Copies of Maryland Vehicle Law § 25-204, §25-205, §25-206, §25-206.1, and §25.206.2 are attached for your reference. 

State and local government agencies and towing companies are authorized users of private information.  As with all private information, it must be used only for the notifications and duties the agency is to perform. 

7.  I get a lot of deals where the F&I Dept. has on title application “So & So, Inc.” as owner and John Doe as co-owner.  I know that incorporating a business separates it from the owner, but is it okay to show “c/o” (in care of ) John Doe?  If so, do we put it through CVR as a lease?  Or in the “continuation” field of the business (owner) name?  We usually just tell customer we can’t put an individual’s name as co-owner to a business.

Use of C/O

This is normally used when the owner (business entity or individual) of a vehicle is located out of state but the vehicle is being used in the State of Maryland.  Since a Maryland address is required by law, the application must reflect the name and address of the person using or leasing the vehicle in Maryland, preceded by C/O.  The title application is completed as follows:

          Owner                                                                    Co-owner

          So & So Inc.                                                         c/o John Doe

          519 Best Street              Anywhere   AA          MD   21987

          A Z soundex is always used with a care of even if the owner is an individual.

CVR users may show this information in a similar manner as they would a lease.

Even though the lessee’s (or driver’s) name is entered in the space for a co-owner preceded by c/o, THEY ARE NOT THE CO-OWNER.  They are considered to be part of the address.  The owner needs to sign all applications and documents.  The person listed as the c/o may Not sign unless they are granted power of attorney or they are an officer of the corporation.   

8.  Another scenario...  Customer trades in car, but has no tax liability because trade is worth more than the new car.  Customer is from Ohio, we get Maryland soundex number from Ohio Driver’s License and title and register new car in Maryland.  We pay off trade and Chrysler Credit sends us Original Certificate of Origin!  Customer never title vehicle anywhere.  They are military and were stationed in Germany.  Is it the customer’s responsibility to title the car (& pay taxes on the $27000.00 allowed for the vehicle)?  Or are we supposed to title it in the dealership name?  If so, how?  Do we have to pay taxes?  The customers can assign the back of the CO to us, can they?  What do we do?

If the customer is U.S. Military and was stationed in Germany he should be able to provide you with the Usareur (United States Army Europe) Registration.  The Usareur registration will serve as the ownership document along with the Certificate of Origin, the lien release provided by Chrysler Credit, and the stamped US Customs document, the Untied States Department of Transportation HS-7 form showing that the vehicle meets US specifications, and the EPA 3520-1 document.  After reviewing the documents to ensue that all requirements are met, the MVA will issue a dealer resale title, tax exempt.  You will pay a $50.00 title fee.  Please note that if the vehicle was initially sold through Military Sales, it meets US specifications. 

9. The $100 processing fee limit that we are allowed; Is there any adjustment for out of state customers?  Some out of state tag services charge more than $100 for their services.  Can we pass that cost along to the customers?  We do an exorbitant amount of out of state deals and it is quite time-consuming to begin with, since I have to reach each form and fill it out with extreme care not to make any mistakes.  There is also a lot of back up phone calls to make, to find specific requirements in specific jurisdictions.  Believe me, not everything is on the states’ web pages.  And we have to Fed Ex everything back and forth, sometimes more than once.

The document fee (dealer processing charge) is not required by law to be charged by the dealer.  However, if the dealer does charge a processing charge, it is limited to $100.00 under §15-311.1(see attached) of the Maryland Vehicle Law and must be included in the “Total Purchase Price” as defined under §13-809 (see attached).    

Maryland dealers are not required by law to submit transactions for out of state customers.  If you do so in order to perfect a lien, it is considered a part of the cost of doing business.    

10.  Since trade allowance on excise tax is given on any vehicle traded, regardless if it was titled in the same names as the newly purchased vehicle, why can’t we use a “dealer duplicate” title application when the names on the new car and the trade aren’t exactly the same?  We’re told we have to use a standard (VR-018) application. 

    A trade-in allowance may be deducted if:

      (1) The owner or co-owner of the trade-in vehicle is the owner or co-owner of the vehicle being purchased; or

      (2) A relative, as defined in §13-810(c)(3), of the owner or co-owner of the trade-in vehicle, is the owner or co-owner of the vehicle being purchased.

   The relatives listed in that section of law are: For a relative who qualifies for a trade-in allowance, the dealer shall submit an application for a certificate of title to the administration with the attached:

      (1) A completed application for Maryland Gift Certification (VR-103) certifying the relationship to the owner or co-owner of the trade-in vehicle and vehicle being purchased; and

      (2) Proof of the relationship if last names of the relatives are different.

Transactions submitted for Dealer duplicate title transactions, Form VR-3, will be processed as long as the owner or co-owner of the trade in vehicle is also an owner or co-owner of the purchased vehicle or a spouse, son, daughter, grandchild, parent, sister, brother, grandparent, father-in-law, mother-in-law, son-in-law, or daughter in law of the purchased vehicle.

11.  Our Finance/Sales Department is constantly spelling names wrong, or using wrongnames and/or nicknames on bills of sale, contracts, etc.  Apparently, getting the customers back in to sign correct paperwork is too much of a hassle.  What could the legal repercussions be of having all the paperwork with wrong names?  The title and registration is correct, of course, because it is according to the soundex number.

The names used on titles, registrations, contracts, and bills of sale “need to be consistent”.  The Finance and Sales department needs to make sure they are looking at the names on the Maryland driver License or ID card presented.  Where questions of ownership, liens, and financial responsibility are concerned, MVA and dealer records are quite often needed to resolve many legal matters.  Court matters repossessions and death of vehicle owner issues can also be complicated by the inconsistent use of names. 

You also need to be concerned about times when law enforcement needs to have access the records or MVA is conducting an audit.  Ownership needs to be clearly defined. 

Customers wanting to change their name with the MVA can do so by completing the VR-154 and providing the required back-up documentation in the following ways:

(Instructions on back of VR-154)

1. On the top left-hand portion of the reverse side, copy all information directly from your present driver’s license (be sure to include your driver’s license number). If you do not have a Maryland driver’s license and only want to change your name and/or address on vehicle title and registration documents, simply print your full name and date of birth in the spaces provided.

2. On the top right-hand portion of the reverse side, print only the information you want changed. Print your new name or new address,

etc. Be sure to check the reason if you change your name.

3. Names may be changed in several ways in order to comply with the vehicle laws. If a name is changed through marriage or divorce, a copy of the marriage certificate or divorce decree is required. An individual may reassume a name previously used, provided the name is used openly, consistently, and without fraudulent intent. To assume your birth name, or other former name, which cannot be verified from our records, you must submit a copy of your birth certificate, marriage certificate and one other form of identification, such as a social security card, a voter’s registration card or a bank statement. Please complete affidavit on the reverse side.

4. A change of name may also be accomplished by a court order. Please consult your attorney.

5. If parties to a marriage assume the other spouse’s surname in conjunction with their own, the MVA will accept hyphenated surnames.

The complete name, including spaces, may not exceed thirty characters.

6. A change of name by common law refers to a name that an individual has assumed and uses openly, consistently, and without fraudulent intent. To assume a name under the common law of this state, you must submit a copy of your birth certificate and any driver’s

license issued in the name previously used before. You must also submit in your common law name, your original social security card (or social security records) and at least two (2) documents from the following categories: tax records, selective service card or records, voter registration card or records, passport, government photo I.D., baptismal certificate, banking records, or other proof of  age and identity that is satisfactory to the MVA.

7. If you are leasing a vehicle, please complete another Change of Name/Address form using the owner and vehicle information from the leased vehicle’s registration card.

A commercial driver must obtain a corrected license whenever the commercial driver changes his name or her name and/or mailing address.

12.  Many customers state they want to transfer tags, but have not disposed of old car yet.  F&I usually puts them on a temp and tells them to “get back” to us with the information.  (I’m supposed to guess what’s going on when I get the deal).  Needless to say, the old car doesn’t always get disposed of and we haven’t collected enough for the new tags – or, if we did collect enough, nothing was noted about a possible transfer, and I’ve already issued new tags that the owner now doesn’t want and we now have to pay for a transfer tag also.  (the customer goes to the MVA and is told to see the dealer).  In this situation, as a matter of course, should we just “title only”, collect no tag fees, and tell the customer (when they figure out what they want), to do their own registration in 2-3 weeks?  Also, is it wrong to refuse to issue new tags if we only collected a transfer fee and now the customer can’t transfer the tags?  Of course, we issue a refund of the transfer fee that we collected.

In this instance, issuing the temporary tag is the right procedure.  The customer needs to be informed at the time of purchase that they need to provide you with the disposition of the old vehicle so that you can complete the transfer.  If they do not provide you with the information and you do purchase a new set of tags, and then find that the customer has disposed of the old vehicle, they can still transfer the tags and apply for a refund on the unused set of new tags that you purchased for the customer.  If the cost of the new tags purchased is to be refunded to the dealer, we will need a letter from both the dealer and the customer stating that the refund is to go to the dealership submitted with the refund request.

Just applying for title only may cause confusion for the customer.  The customer may end up driving with tags that they assume have been transferred, when actually they have not.  

Excise Tax Exemption §13-810 (14) states:  A vehicle otherwise exempt from the excise tax by any other applicable law. What does this include? 

 Federal Credit Unions

Cooperatives

MAIF under 13-810 (a)(3)

13.  If the Company files a federal tax form 501 C is that sufficient?  What is the difference between a 501C and a 501 C (3) or is there one?

A company that didn’t meet the requirements of §13-810 did not have to pay excise tax because they submitted a letter mentioning their exemption under Code Section 501 C (3).  Is that proof enough?

No that is not sufficient proof.  Only two exemptions mention Section 501(C)(3) OF THE Internal Revenue code, and in both cases other qualifications need to be met as well. 

One section is: 

§13-810(a)(12) – a school bus owned by a religious or private school which is exempt under § 501(c)(3) of the Internal Revenue code

Or

§13-810(a)(24) – A vehicle acquired by a religious, charitable, or volunteer organization exempt from taxation under § 501(c)(3) of the Internal Revenue Code, the Department of Human Resources, or a local department of social services for the purpose of transferring the vehicle to a Family Investment Program recipient or and individual certified by the Department of Human Resources or a local department of social services as eligible for the transfer. 

14.  Would like a listing of room numbers and phone numbers for departments like ERT, Central Lien, and Title Corrections, etc.

An MVA Contact list is attached.

15.  Who is authorized to sign odometer statement?

See the truth in Mileage Act of 1986 in you Dealer manual.

On the assignment of ownership on the title, the owner’s signatures must be signed, unless a lien holder was holding the title or a duplicate title is needed.  Once the title is received, the customer has the option of completing the assignment and certifying the mileage themselves, or they may use the Secured Power of Attorney for Odometer Disclosure and allow the dealership to certify to the mileage.  Remember, when the Power of Attorney for Odometer Disclosure is used, it also has to be accompanied by the Restricted Power of Attorney to assign the ownership. 

Anyone having secure power of attorney to certify the mileage cannot sign as both the transferee and transferor for the same vehicle.  

16.  What recourse do we have if we pay off a loan for an out of state customer and the lien holder won’t give us the out of state title?

It is advised that you discuss this matter with your legal department. 

Maryland Vehicle law §13-205 requires that the lien holder provide the lien release to

The owner;

the Administration;

and

A licensed dealer under title 15, Subtitle 3 of this article who, on behalf of the owner, pays off the security interest if the owner authorizes the secured party in writing to deliver a copy of the release to the dealer. 

17.   Dealer Dup – Why can’t we use a restricted POA to get a dealer dup on a trade?  When we have to send bill of sale showing trade odometer of trade?  This doesn’t make sense.  Also, causes Title and Registration clerks a lot of headache.  What is the purpose of the restricted POA?

Maryland Law requires that a title, even a duplicate be mailed to the owner.  There is a policy that allows an owner presenting identification to pick up the duplicate title and policy allowing a dealer using a VR-3 to pick up a title (or have it mailed to the dealership).  There is also a special power of attorney that an individual can sign to allow a title service to pick up a duplicate title on their behalf.  This policy of having the customer actually sign the VR-3 ensures that the customer is aware that the dealer will be receiving a title on their behalf. 

Note:  You may use the restricted power of attorney on the VR-18, but the title will be mailed to the customer, not the dealership. 

You may also use the restricted power of attorney to sign the VR-5, substitute tag applications, class M certifications, and many other forms except those used for odometer disclosure. 

The VR-3 procedure was developed to assist dealers who take in vehicles as a trade, and the customer did not have the title at the time the transaction took place.  That is the reason the bill of sale identifying the vehicle, as a trade, is required. 

18.  What is the policy regarding the necessity of including a copy of the buyers order with a title transaction showing a trade?

The buyers order is only needed if the newly designed VR-5 or dealer reassignment showing “trade in calculation” is not utilized.  If one of the older forms is used for tax certification, then the buyers order must be submitted. 

19.  Avalanche – is this a truck or MPV?  HHR-is this a car?  CVR pulls MPV when VIN# shows MPV on CO.

The Avalanche is a truck class EPO – the Avalanche has an open bed therefore it is classified as and EPO.  A truck must have a permanently mounted cap to be classified as a class M. 

The HHR is a passenger car Class A. 

See §11-136.2 Multipurpose Passenger Vehicle (page 4 of the dealer manual)

20.  Discuss stipulations for the issuance of Farm Tags.

See article §13-921 – Farm Truck Registration

                   §13-911 – Definitions

                    Form VR-97 -

                    Form VR-331 – Certification for Issuance of Farm Area/Island Tags

Also see class chart for additional information;

Class EFT Farm Truck

Class FF Tram Tractor

Class K Farm Area Vehicle