Minnesota officials seized a "FMUSLMS" license plate and apologized for issuing it at a driver's request, saying on Wednesday that approval procedures for so-called vanity plates were under review.
An uproar over the license plate erupted over the weekend after a St. Cloud area resident posted a photograph of the license plate on social media.
Governor Mark Dayton denounced the plate, saying he was "appalled" it had been issued in Minnesota and ordering the Department of Public Safety to get it off the road and take a second look at approval procedures for personalized plates.
"It is offensive, and the person who requested it should be ashamed. That prejudice has no place in Minnesota," Dayton said in a statement issued on Monday.
On his application for the plate, the owner listed alternative choices as "PETALOL" and "8SLUGTHG," saying all three were the names of musical bands in which he is a member.
By Monday evening, the state had confiscated the plate.
"We continue to review the process for approving personalized license plates," Bruce Gordon, state public safety spokesman, said on Wednesday.
"This personalized license plate should never have been issued; it is offensive and distasteful," the department said in a statement. "The Department of Public Safety apologizes for this error."
Across the U.S. each year, thousands of license plate requests are denied by motor vehicle agencies that find they violate state rules. The myriad that have passed the acceptability test include "DAMNIML8" and "WTF", while those that failed include "ILVTOFU," "GAY" and "TOILET."
Indiana's Supreme Court in November said the state acted properly in forbidding a police officer from using a vanity license plate that said "0INK," reversing a lower court ruling.
But a New Hampshire top court in May ruled against the motor vehicle department and allowed a driver to obtain a plate reading "COPSLIE."
In 2012, there were an estimated 9 million personalized license plates in the United States.
The Minnesota plate that was scrapped this week is "symptomatic of the overall rise of Islamophobia" in the United States, said Ibrahim Hooper, spokesman for the Council on American-Islamic Relations.
"Everyone has a right to be a bigot if they want to, but not on a state-issued license plate," Hooper said.