Sunday, August 21, 2011

State's Rights vs Interstate Commerce

by Ronnie Spangler

Due to a recent encounter with the County Clerk's Office in the state I live in (Tn), a couple of questions have come to mind. Where does State's Rights vs Interstate Commerce begin and end? And, does a State have the right to punish their residents for buying a product from out of state by forcing them to pay, in this case Tennessee, sales tax even if the person has already paid the sales tax in the state where the transaction occurred? Finally in the case of buying a vehicle outside of Tennessee, how can Tn refuse to license the vehicle simply because the individual did not pay cash for the vehicle and obtain the title to that vehicle? Generally if a person buys a vehicle from a nationwide dealer and finances the vehicle through a national financial institution the vehicle will have a lien placed on the vehicle and the title is held until the lien is satisfied. The dealer will fill out all the appropriate documents to allow the person to license and register the vehicle in the state they live in. At least this is the way most states in America handle the sales of vehicles, but not in Tn.

To be clear in today's economy most people cannot afford to pay $20 or $30 thousand for a used or new vehicle so financing is and always has been a common practice. Also this does not pertain to a private sale from one individual to another.

The above scenario happened to me and being naive and unaware of Tn. laws I had no idea I could not license or register the vehicle with the documentation given to me from the dealer. Unfortunately the dealer who also has dealerships in Tn was unaware of Tn laws governing title and registration of vehicles in Tn. After being told by the ladies at the local Cumberland County Clerk's Office under Mr. Jule Bryson that I could not license or register the vehicle without the title, I contacted the dealer and the lien holder for guidance. They were both as confused as I.

The financial institution explained what I tried to explain to the County Clerk's office. That is, for practical reasons the lien holder will not release the title of a vehicle to the customer until the lien is satisfied. In normal situations like this every other state accepts the electronic transfer of the title showing the new owner and lien holder, while the lien holder retains possession of the original title. According to the County Clerk's office this is not acceptable under Tn. law.


When a confrontation over this law developed between me and the ladies in the Clerk's office I was told they didn't really care. The only thing they were interested in was collecting the taxes and seeing the title. When I informed them this was a stupid a law their response was: "If you don't like the law maybe you should move."

As I sit here today I have a vehicle that I must continue to make payments on and carry insurance on even though I cannot drive the vehicle in Tn or any other state. To me this throws the theory of interstate commerce right out the door. It sounds like Tn is punishing their residents for buying a product out of state instead of buying within Tn.

I have contacted the Tn Speaker of the House Beth Harwell and she seemed surprised. She has promised to check into the situation and contact me later. Whether this is just overzealous folks at the County Clerk's office or really the law in Tennessee makes a person wonder how many other State and Local officials are penalizing their residents for participating in Interstate Commerce.

Technorati Tags:, , , , , , , , ,
Generated By Technorati Tag Generator

No comments:

Post a Comment