Bradley County Sheriff Eric Watson has responded to a complaint from the Tennessee Motor Vehicle Commission that was prompted by a Times Free Press article alleging he violated state statutes by "curbstoning" vehicles.
Curbstoning, the practice of selling open-title cars on the side of the road, is illegal in Tennessee.
That Dec. 4 article stated Watson bought 18 vehicles in his name - 11 in Miami and seven in Washington, D.C. - and then sold them on roadsides and online without a dealer's license, which is required for anyone selling more than five vehicles a year.
In response, the Tennessee Motor Vehicle Commission opened a complaint, asking for written responses from both Watson and the dealer under which he is registered as a salesman, Best Buy Auto and Leasing.
In a letter to the commission, Watson wrote that he applied for and received a salesman's license in September when he realized he would exceed the five-car sales limit for 2016.
But that license does not allow him to sell cars on roadsides or sell more than five cars a year in his own name, according to state law.
"A salesperson license by definition in TCA 55-17-102 allows that person to sell motor vehicles owned by another and [that salesperson] must be working for a motor vehicle dealer," Kevin Walters, spokesman for the Department of Commerce and Insurance, wrote in an email.
As previously reported by the Times Free Press, that license allows Watson only to work out of Best Buy Auto and Leasing and sell its cars.
According to information found online at TN.gov, someone with a salesperson's license is "anyone employed by a licensed motor vehicle dealer who is engaged in the business of effecting or attempting to effect the sale or purchase of motor vehicles or recreational vehicles owned by some other person to residents of the state."
In his letter, Watson denied improper activity, saying, "My conduct has not, and does not, constitute curbstoning "
After the publication of the original article, both Watson and Best Buy Auto and Leasing received notice from the Tennessee Department of Commerce and Insurance that a complaint had been opened regarding Watson's alleged off-site sales. Both also received a copy of the Times Free Press article.
The notice requested a written response "to the allegations involving the sale of motor vehicles without a Motor Vehicle Dealer License within fourteen (14) days."
In his response to the complaint, Watson also stated, "Contrary to the direct statements, implications and innuendo in the newspaper, these motor vehicles were titled in my name and I have paid taxes on those motor vehicles."
The Times Free Press reported that the cars were titled in his name. According to sales information obtained by the newspaper, Watson paid taxes on the 11 cars from Miami, but it is not clear if he did for the cars bought in Washington, D.C.
For the Miami cars, each bill of sale shows a 7 percent tax paid on each vehicle, but the cars from Washington, D.C., have a zero percent tax.
Rob Hines, a deputy clerk for Hamilton County Clerk William Knowles, said Watson would have been required to pay sales tax in Tennessee before registering any vehicles, but if a sales tax is paid in another state, Tennessee will give the vehicle owner a sales tax credit equal to what has already been paid.
The owner is then required to pay any remaining difference between the sales tax paid and Tennessee's sales tax, which is 7 percent for vehicles under $3,000 and 9.25 percent for vehicles over $3,000.
"I am saddened by the blatant misstatements by the Chattanooga Times Free Press articles of the past and in this instance," Watson said in the letter. "I know that the so-called contributors to the articles are open, public opponents of my service as sheriff."
Alison Gerber, editor of the Times Free Press, said Watson has not asked for a correction or contacted the newspaper to dispute any facts of the story.