Overview
House Bill 718 (HB 718), passed during the 88th Texas Legislative Session in 2023, represents one of the most significant changes to Texas Department of Motor Vehicles (TxDMV) operational policy. The bill is an assertive response to eliminate fraud opportunities with paper tags and permits by replacing many of them with metal plates.
The bill eliminates six (6) distinct paper tags used in the current registration process:
- Buyer’s Tags
- Internet Down Tags
- Vehicle Specific Tags
- Agent Specific Tags
- One-Trip Permits
- 30-Day Permits
These tags and permits will be replaced with four (4) new limited-use license plate types:
- Buyer Provisional Plate: Used when requested plate type is not in inventory.
- Dealer Temporary Plate: Used by dealers for vehicles pending sale.
- Out-of-State Buyer Plate: Used for vehicles sold out-of-state.
- Temporary Registration Plate: Used for temporary registration.
These new license plates will be used to cover specific temporary vehicle registration needs and will not replace metal dealer license plates or the standard, general issue license plates that will be issued to individuals purchasing new and used vehicles.
The requirements and provisions of the bill take effect on July 1, 2025.
Change in Disposition of License Plates at Vehicle Transfer
The bill requires that standard, general issue license plates issued to a vehicle remain with the vehicle when sold or transferred to a new party. Individuals who have purchased personalized or specialty plates will be allowed to retain possession and ownership of those plates, which they may request to be assigned to another vehicle.
As is currently recommended, it will become increasingly important after July 1, 2025, that individuals transferring or selling a vehicle complete a Vehicle Transfer Notification (VTN) to report the transfer of the vehicle. This process is intended to help protect the seller from liability for criminal or civil acts involving the vehicle and the person(s) or entity taking ownership. Licensed Texas dealers are required by the bill to submit a VTN at the time of sale or transfer.
Electronic Processing of Dealer Transactions
Effective July 1, 2025, this bill requires Texas licensed dealers to use the department’s webDEALER system to electronically process title and registration for vehicle sales with county offices. Dealers without webDEALER accounts and plate inventories will not be able to complete vehicle sales transactions beginning July 1, 2025. The department offers training on the webDEALER system. See the TxDMV events calendar for training information. We also offer on-demand training for dealers in English or Español. Dealers are encouraged to reach out to their local county tax assessor-collector's office to begin coordinating with them on training efforts and to gain access to webDEALER.
Texas Administrative Code Rules
The bill requires TxDMV to adopt administrative rules governing the new license plate operations by December 1, 2024. The department has worked with industry stakeholders and members of the public since February 2024, to develop and review draft rules that were posted for public comment in June 2024. The proposed rules are posted here under drafts for Chapters 215 and 217. Following revisions made to address items identified through the public comment process, the TxDMV Board adopted final rules during an open meeting on October 24, 2024.
Implementation Funding
The 88th Texas Legislature appropriated $35 million to TxDMV in the 2024-25 biennial budget to implement and enforce the requirements of HB 718. The funding included 44 total additional staff positions and expenditures for additional system needs and programming enhancements to existing transaction software. To ensure revenue continues to be sufficient to cover the department’s operating expenses, including the new HB 718 expenditures, the TxDMV Board is planning to set the one-time buyer’s license plate fee at $10 per transaction.