Category Archives: Regulations

Trip Permits

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Trip Permits

Trip Permits are (generally) short term special use authorizations for a truck to operate with a state it does not normally operate within or hauling an unusually large or heavy load, even in the base state the truck is licensed in.

Many trucking companies do not pay the registration fees for all their trucks to be operated in all states. They many only establish authority to operate their trucks in a hand-full of states where they do most of their business. However, occasionally they need to send one or more rigs to other states to deliver or pickup cargo. TO legally enter a state and travel it’s highways, it is necessary for the company to obtain a Trip Permit. This can be done several ways. The company can contact the state directly and complete the process or the company can use a 3rd party commercial truck permit service. [If you google.com or bing.com Trip Permits, you will get dozens of companies that provide these services.]

The states, for the most part of made the process easy because it is all about revenue collection. To get the permit, you pay money. Now there are exceptions to the easy to do policy. Some states are much friendlier to work with then others. Names will not be named. That is one reason many companies will just turn to a commercial permitting company. Since these companies do this all day long and many have agents on duty 24/7, the extra cost of using them is offset by their ability to navigate the processes for each state and get it right the first time. A permit with errors could result in major fines and problems, including the truck and cargo being seized, until the issues are resolved.

Another common Trip Permit situation involves the moving of large or heavy loads. Loads exceeding 80,000 lbs generally must have special use permits. Key exceptions are that in some states, such as Michigan, truck/trailer combinations may have extra axles and thus authorized proportionately large loads. However, these trucks are restricted to in-state only and also pay substantially higher registration fees in the first place. Regardless of obtaining a trip permit, a truck is not allowed to haul heavier loads without more axles/wheels so it is not a simple matter to get an over weight permit and then put more on your standard 5 axle/18 wheeler.

Special Use Trip Permits may be required for wide and/or tall loads. As a part of the permitting process, the state(s) will identify the routes the load is authorized to take, the hours when the load can be moved (generally not at night) and special equipment/banners/markers that must be attached to the load. Additionally, the trucking company may be required to hire ‘Escorts’ to either precede the load, follow the load or both. Extra ordinarily large loads may have a police escort leading the procession, two private escort cars in front of the load and one of them with a height pole to check for anything not high enough to allow the load to pass under, and then a following escort car to warn drivers coming up from the rear an attempting to pass the load. All these requirements will be noted and specified in the trip permit or authorizations.

In the modern day of computers and online services and the use of the IFTA and IRP, trip permits are not as big an issue as they use to, however, a career truck driver will likely encounter a situation where they will need to deal with them.

International Fuel Tax Association (IFTA)

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International Fuel Tax Association (IFTA)

The International Fuel Tax Association, Inc., is commonly simply referred to as the IFTA, and was formed to manage and administer the International Fuel Tax Agreement. The ‘lower’ 48 or contiguous US States and the 10 Canadian Providences are members and use the IFTA as a means to efficiently collect fuel taxes from motor carriers (trucking and bus companies) that use the highways in their jurisdictions.

The IFTA Mission Statement is: “To foster trust and cooperation among the jurisdictions through efficient and effective planning and coordination and oversight of activities necessary to administer the International Fuel Tax Agreement for the betterment of the members and our partners.”

While the IFTA is based in Arizona, the primary dealings are with the appropriate (revenue collecting) agency in the state where the trucking company is based.

To understand the purpose of the IFTA, you need to understand that each state assesses fuel taxes on fuel (both gasoline and diesel) which is primarily used for road construction and maintenance. There may also be state and local sales taxes figured into the price at the pump. Since each state will have different tax rates – both the sales tax portion and the road fund portion – prices at the pump between two truck stops, one on each side of a stateline between two states may have different prices. Even if the prices are the same, an issue is that if a truck driver fills up 200 gallons in state A, and then drives thru state B, to state C and then finally into state D, they have used the roads in 4 states but paid all the taxes to just one.

Before the establishment of the International Fuel Tax Association, each state collected its own fuel taxes and not all states used the same procedures. States generally established “Ports of Entry” that would issue permits and assure the tax collection. If a trucking company knew it would often be traveling thru multiple states, they might file permits for those states in advance. However, it was still a burdensome process on both the states and especially the trucking companies. A company with only a few trucks might be able to manage the paperwork, but as the company grew to more trucks servicing clients in more states, the paperwork and support requirements were business prohibitive.

Pre-IFTA trucks in inter-state commerce carried a special plate (“Bingo Plates”) upon which each state’s permit sticker was affixed. This system was inefficient and costly for each state to manage.

Post-IFTA, the driver’s purchases fuel as needed or based on company policy. The driver also maintains a daily trip log that keeps track of the mileage in each State (or Providences) by noting the mileage at each state line. The driver will also note miles on toll roads as some toll roads may have  a different fuel tax assessment. At the end of each quarter, the company uses purchased fuel information and uses a average fuel mileage (MPG) to calculate the taxes owed to each jurisdiction – regardless of where the fuel was actually purchased. The company then files a single report with their home state. The states, via working with the IFTA, then transfer the balances between themselves as a form of equalization.

It should be noted that it is possible to be owed a refund or owe additional taxes. This can occur if, for example, all fuel is purchased in a state with a low tax and yet a lot of miles are driven in one or more states with higher tax rates. However, if the Fuel is purchased in high tax states but a lot of miles are driven in lower tax rate states, a refund may be owed. The solution to this is to attempt to buy appropriate amounts of fuel in each state (at least with in reason if not to the exact amounts) so that you are paying applicable tax rates. Many new drivers (or even some older ones) that go to work for large trucking companies are often confused by the company’s use of a fuel purchase manager, since often they are told to stop and get limited amounts of fuel at multiple locations rather then one large purchase at a single truck stop. This is because the system is attempting to distribute the purchases across the numerous locations to prevent under or over paying the fuel taxes each quarter.

Three states [Kentucky, New Mexico, and New York] have a “weight-mile” tax in addition to the standard fuel tax. Oregon uses a weight-mile tax calculation.

The IFTA addresses the issue of payment of fuel taxes to the appropriate jurisdictions while the International Registration Plan or IRP address issues related to the vehicle registration and thus permission to even be operated on the highways of each state.

There are a lot of theories on how to reduce your IFTA bill, but none of them legally. If you drive miles in a state you are expected to report that mileage and you will owe that amount. The only way to owe less is to report fewer miles, but in the event you are caught cheating, the fines and penalties will eat up a lot more then the savings.

For owner-operators [O/Os] one area that could cost them money is if the leasing company uses a fleet average to figure average MPG as opposed to a truck average. Some truckers drive more efficiently then others and many O/Os like to driver newer, more efficient trucks. The result could be that the O/Os are assessed a lower MPG meaning they could pay more IFTA while the less efficient trucks/drivers benefit from the owner/operators higher averages.

International Registration Plan (IRP)

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International Registration Plan

The International Registration Plan (IRP) is a cooperative reciprocity registration agreement between the 48 contiguous United States and the Canadian Provinces. Unlike automobiles, each state in which a commercial truck [or trailer] is operated, the states want the truck registered with them which included paying appropriate taxes and receiving a license plate. However, that could require a truck to display 50 or more license plates depending on where the company operates. And this would be for every truck power unit and trailer in their fleet.

Enter the International Registration Plan.  IRP’s fundamental principle is to promote and encourage the fullest possible use of the highway system. This is accomplished by encouraging and enabling trucking companies to efficiently and easily handle freight in multiple states, thus providing economic activities.

Rather then the motor carrier contacting each state registering their trucks, individually, where they operate, a base ‘Apportioned’ tag is obtained from the company’s home state. The company then uses the IRP to selectively register the truck in all states/territories where it will be operated. The IRP then apportions the truck’s registration fees to each of the accepted states. You can check the IRP’s website for specifics on the mechanics of this. Now rather then a boat load of paperwork and license plates, the truck has one plate and the driver carries a card with the states of authorization to operate in the cab. In the event of traffic stop by a police officer, the driver hands, among other things, the base plate registration and the IRP ID card. This allows the officer to know the truck is authorized to operate in that state.

As the more states a truck is authorized to operate in the costs go up, some companies will only ‘register’ the truck in a few states – those states the truck is likely to operate in. If a company only operates in the Pacific Time Zone States, it would not be prudent or cost effective or paperwork logical to also authorize 50 trucks with trailers to operate along the Eastern Seaboard.

The draw back for not registering every truck and/or trailer in every state is if the company is offered an opportunity to haul a load to one of the unauthorized states. The company can turn down the work, which may mean it would not be offered such loads in the future. Or the company can accept the load, but the truck could be ticketed and seized if caught driving without proper permits for every state along the route. This is another advantage of the International Registration Plan. The ability to obtain temporarily permits for those states to legally operate.

It must be noted that there are two types of permits that will need to be obtained, if necessary. The registration via the International Registration Plan, and the fuel tax permits via International Fuel Tax Association (IFTA).

A company can file and maintain their own permits, but like everything, there are costs both direct (membership fees) and indirect (manpower, training) to handle permits. This can be especially expensive in smaller companies. There are numerous companies that provide permit services. These companies can generally handle both IRP and IFTA permits as needed. However, temporary permits are much more expensive if used extensively over full year permits. A company would be much wiser to obtain all permits that they may need for the entire year. Another problem with temporary permits is that there can be delays in obtaining them for those last minute loads, risking missing deadlines.

This is only a brief overview of the IRP system and is designed to alert the truck driver to the fact that the International Registration Plan is something they need to be aware of with regards to their truck’s paperwork.