Entity selection - What type of
business do you want to operate, a sole proprietorship, a corporation, an
LLC? The pro's and con's of each are described in my section on
Entity Selection. You will want to
determine this first because it costs you time and money to change your
registered name with all the federal and state agencies.
Insurance - You need to identify an
insurance agent that operates in your state and can also help coordinate
getting your authority and insurance. One of the best sources is
trucking magazines but if you can attend one of the big truck shows like
the Midwest Truck Show in Louisville, KY or the Great American Truck Show
in Dallas, TX, there are a number of agents that have booths. Don't
be afraid to compare rates.
Federal -- USDOT/MC Numbers - You get this from the Federal Motor
Carrier Safety Administration (FMCSA). The following link will take
you to the
FMCSA Licensing & Registration website. In fact, there is an
interactive question-and-answer section that will guide you through what
forms you will need - for a government website, it is pretty good!
Just click on the above link and the "Start the Step-by-Step Registration
Guide" link in the "Help Me Register" section. You will also file for
you USDOT and Motor Carrier (MC) numbers and complete your BOC-3 for
insurance purposes and to obtain your process agent, in case someone wants
to file suit against you. Once you apply for your USDOT and MC
numbers, a process agent will contact you almost immediately. I
guess one is as good as another but I used
All American Agents of Process.
Once you have a process agent you will probably never talk to them again.
State DOT - I live and my base of
operations was in Texas and was licensed by
TXDOT. You can do an internet search of "State Operating
Authority" and many will be shown. Alternatively, you can go to your
state government's website and search for their Department of
Transportation.
Why do you need a state DOT number?
Well, your state may be different, but in Texas, to transport intra-state
(both consignor and consignee are in Texas) you will need a TXDOT
number. Otherwise, if you are stopped by a state trooper and your
Bill of Lading has BOTH a Texas pickup and delivery and you do not have
a TXDOT number, you will be fined $200.
International Registration Plan (IRP)
- The International Registration Plan (IRP) is an optional program for
licensing commercial vehicles traveling in two or more jurisdictions. The
continental US, District of Columbia and most Canadian provinces are members of IRP. All commercial vehicles weighing over 26,000 lbs
(gross weight) or having three or more axles regardless of weight are
eligible to register.
Under IRP, an
interstate carrier files an application with the jurisdiction in which it
is based. The IRP agreement allows the base jurisdiction to collect the
registration fees for the other jurisdictions the carrier has requested on
their application form. The base jurisdiction issues a cab card for each
vehicle. The cab card lists all the jurisdictions and corresponding
weights the carrier has requested.
International Fuel Tax Agreement - IFTA is a joint agreement between all 48 contiguous
states and 10 Canadian provinces enabling those jurisdictions
to cooperate in the collection and administration of motor fuel taxes. An IFTA account is set up with the base state which authorizes travel in all IFTA jurisdictions.
A single quarterly report must be filed with the
base state, reporting miles traveled and fuel purchased in each state.
After preparing the IFTA report, the trucking company either owes or will
be getting a refund of fuel tax, just like a Federal Form 1040. The base state is responsible for dispersing the funds to the other
jurisdictions or back to you. You need an IFTA license if you travel in two or more
member jurisdictions if your vehicle either weighs more than 26,000
pounds or has three or more axles regardless of weight.
Note: If you travel outside your
base state very seldom it is possible to purchase a trip
permit in each jurisdiction you travel. However, this becomes very
expensive in the long run since having an IFTA license is free.
Single State Registration System -
Single State Registration System (SSRS) renewal for the
2007 registration year is on hold pending federal legislation enacted in
August 2005 which created the Unified Carrier Registration (UCR) program
and repealed SSRS effective January 1, 2007.
The
Federal Motor Carrier Safety Administration (FMCSA) is tasked with
oversight of UCR. FMCSA appointed a board of directors to develop the
rules and regulations to implement the UCR and at this time it is not
complete.
States are attempting to obtain a one year
delay of the repeal of the SSRS. Most Department of Motor Vehicles
are
prepared to mail the 2007 renewal applications to all current SSRS
customers if a delay is approved by Congress.
If a delay is not approved, law enforcement will be
notified nationwide to ensure motor carriers are not cited for SSRS
related infractions. The UCR will require
all motor carriers (private and for-hire) authorized to engage in
interstate transportation of passengers or property and all others
required to register with FMCSA to register with the appropriate base
state.
The UCR will be a federal on-line database
containing safety and fitness information and identification of interstate
motor carriers. The information shall be accessible by federal agencies,
states, representatives of the motor carrier industry and the public.
Seemingly this is a similar system to SAFERSYS
which is currently in place at the FMCSA.
Political comment: As you can
readily see, governmental oversight of trucking is very daunting.
Most of it is done in the name of "Safety" but, in my opinion, it is done
in the name of "Revenue for the State." Furthermore, I have not
mentioned the property tax statements you will receive from several
states, Kansas and Arkansas, particularly, simply from the IFTA reporting
because you drove across their state. Whatever happened to "taxation
without representation"?
This
page is dedicated to truckers, primarily owner-operators and those desiring
to become owner-operators. Why? Because I used to own four trucks and six trailers and had them all running
around the country at the same time - while also managing my CPA practice - until the summer of 2006 when I decided to get out of
trucking. The 2003 Peterbilt 387 and 2001 Dorsey reefer pictured to
the right were my last truck and trailer.