As promised in last month’s Becoming an Owner Operator post on purchasing trucking equipment, we’re back this month to discuss licensing and registration. As mentioned in our March Becoming an Owner Operator post, driver’s are required to have certain licenses and endorsements just to drive a commercial vehicle. This post will build off of March’s foundation and discuss other registrations owner operators must attend to before hitting the road.
USDOT and MC Numbers
In general, you need a USDOT number if you operate a commercial vehicle transporting passengers or hauling cargo in interstate commerce, or you transport hazardous materials intrastate in quantities requiring a safety permit.
If you don’t match the above mentioned criteria, you may still need a USDOT number. As of December 12, 2015, 33 of the 50 states require a USDOT Number for commercial vehicle registrants. To see if your state is on the list, click here.
You will be instantly issued a US DOT number upon registering online via the Unified Registration System. Currently, registration is free, but there will be a $300 fee for new applicants beginning September 30, 2016.
Additionally, according to the FMCSA, companies that do the following are required to have interstate Operating Authority (MC number) in addition to a DOT number:
- Operate as for-hire carriers (for a fee or other compensation)
- Transport passengers in interstate commerce
- Transport federally-regulated commodities or arranging for their transport, in interstate commerce.
There is a filing fee of $300 to obtain your own authority. Be sure to know which type of authority you need since the fee must be submitted for each kind of authority sought; there are no refunds for mistaken applications. Additionally, it typically takes 20-25 business days for new applicants to become registered.
Heavy Vehicle Use Tax
According to the Federal Highway Administration’s website, heavy vehicle use tax (HVUT) is a fee assessed annually on heavy vehicles operating on public highways at registered gross weights equal to or exceeding 55,000 pounds. The gross taxable weight of a vehicle is determined by adding:
- the actual unloaded weight of the vehicle fully equipped for service
- the actual unloaded weight of any trailers or semitrailers fully equipped for service customarily used in combination with the vehicle, and
- the weight of the maximum load customarily carried on the vehicle and on any trailers or semitrailers customarily used in combination with the vehicle.
If the gross taxable weight is from 55,000 to 75,000 pounds, the HVUT is $100, plus $22 per 1,000 pounds over 55,000 pounds. For over 75,000-pound vehicles, the maximum HVUT is $550 per year. Those who qualify for HVUT must complete IRS Form 2290.
A commercial vehicle may be exempt from HVUT if it travels less than 5,000 miles annually. However, IRS Form 2290 must still be filed.
In Minnesota, vehicles traveling exclusively within the state are required to display Minnesota-based license plates.
Intrastate vehicles may be registered and plates obtained at any deputy registrar’s office located throughout the state. Registration fees are determined by the gross vehicle weight and model year of the vehicle.
Owner operators based in Minnesota who drive interstate must display International Registration Plan (IRP) license plates and IRP cab cards or obtain valid trip permits for the state or province in which they wish to travel.
Each IRP registrant is required to file an annual application with the base jurisdiction (i.e., Minnesota). The application lists the vehicles to be apportioned, the fleet mileage, and the declared gross weight for each jurisdiction. For more information, please reference page 13 of Minnesota Truck Regulations, Section 2.
International Fuel Agreement
The International Fuel Agreement (IFTA) is a base jurisdiction fuel tax program that allows interstate carriers to file one fuel report per quarter for all participating IFTA jurisdictions.
The following interstate vehicles are required to display fuel credentials and report fuel use under the IFTA program:
- Power unit having two axles and a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds; or
- Power unit having three or more axles, regardless of weight; or
- Power unit used in combination when the weight of such combination exceeds 26,000 pounds gross vehicle weight or registered gross vehicle weight.
A legible photocopy of the IFTA license must be carried in the cab of each qualified vehicle in the fleet. Additionally, two decals are required per vehicle with one decal placed on each side of the exterior portion of the cab.
To learn more about the IFTA timeline, visit page 17 of Minnesota Truck Regulations, Section 2.
For more information on becoming an owner operator, contact the Independent Contractors Opportunity Network (ICON) today.