Heavy Duty Commercial Vehicle Systems (Jones Fixed
Tristan Brancheau
If a motor vehicle traveling in two or more jurisdictions is a commercial vehicle, the registration requirements depend largely on the weight of the vehicle. If the vehicle has two axles and weighs 26,000 pounds or less, the picture is quite complex, and need not be described here. But if a commercial motor vehicle weighs more than 26,000 pounds, or has more than two axles, either alone or in combination, and travels in more than one state or province, it is probably registered under the International Registration Plan (IRP).
The International Registration Plan is a base-jurisdiction registration reciprocity agreement among the jurisdictions of the United States and Canada that provides for the payment of apportioned commercial motor vehicle registration fees on the basis of fleet miles operated in the various jurisdictions.
The IRP is a document, a set of rules for Plan members to conduct the registration of commercial motor vehicles in a more or less uniform manner. The Plan is not law, per se (although it is considered in the United States to be in the nature of an interstate compact); the statutes of the individual states and provinces give the member jurisdictions the actual authority to require vehicles to register, set the registration fees, and enforce Plan requirements. These statutes also authorize each member to join the Plan.
At the core of the Plan is the base-jurisdiction concept. In essence, this means that a fleet of commercial vehicles operating in more than one jurisdiction and electing to register them under IRP chooses one of these jurisdictions as its IRP base, and deals solely with that jurisdiction for registration purposes. A prospective IRP registrant may have some flexibility in the choice of an IRP base. It may be any IRP jurisdiction in which the registrant's fleet travels, in which it can make its records available for audit, and in which it has an "established place of business," a term for which there is a detailed definition in the Plan. In short, an established place of business need not be the registrant's principal business location, but must be a location where the fleet itself really conducts business. The importance of this is that the choice of a location in which to base its vehicles may involve other tax consequences for a motor carrier.
Under a change to the Plan that took effect with 2015 registrations, a fleet registered under the IRP is automatically authorized -for purposes of vehicle registration -- to travel in all IRP member jurisdictions; that is, the fleet is legally registered in each one. When it issues registration for an IRP fleet, however, the fleet's base jurisdiction collects fees for only those states and provinces in which the fleet traveled during the preceding year. State and provincial commercial vehicle registration fees are annual, and are graduated according to the maximum gross combined weight of the vehicle being registered. The rates vary considerably by jurisdiction. Some fee structures include: recurring annual fees levied in lieu of personal property taxes on vehicles. IRP registration covers only power units, that is, trucks and tractors, and not trailing equipment such as trailers and semitrailers. Trailing equipment is registered in one state only, for nominal fees, and operates interstate on reciprocity.
In addition, by the terms of the Plan, IRP does not apply to certain types of operation. These are noncommercial vehicles, government-owned vehicles, city pick-up and delivery vehicles, and vehicles bearing registration plates covered by reciprocity agreements that apply to certain restricted operations, such as short-haul dump truck or construction equipment operations.
Since 1997, fuel use taxes on heavy vehicles have been collected throughout North America under the International Fuel Tax Agreement (IFTA), a multi-jurisdictional organization that provides a uniform framework for the administration of such taxes. IFTA employs the base-state concept to make fuel use tax administration and compliance simpler and more uniform both for the states and provinces which are IFTA's members and for the interstate motor carrier industry, including for-hire carriers, private carriers, and owner-operators.
A heavier commercial vehicle uses more fuel in its operations than a passenger car, and pays a correspondingly larger amount of fuel tax. States and provinces long ago recognized that under a simple fuel purchase tax regime, some states would get less tax from heavy trucks and buses, proportionate to the operations of those vehicles, than would other states. This would be due in part to differential tax rates, and the effect this has on fueling patterns, but in part also to fueling patterns that have more to do with simple geography. Some states are more apt to be the destination of freight shipments, while others are what are called pass-through states. Truck and bus operators are likelier to fill their tanks -and to pay fuel purchase tax -in destination states.
In the 1940s states began to enact a remedy for what they perceived as a misallocation of fuel taxes paid by truck and bus operators. This has come to be known as the fuel use tax, and is now imposed by practically all states. The fuel use tax may be considered a supplement imposed on heavy commercial vehicles only -- to the fuel purchase tax. It aims to reallocate fuel taxes based not on where truck and bus operators buy fuel (and pay fuel purchase tax) but on where they consume fuel in their operations.
Reporting and payment. IFTA covers the operations of interstate commercial vehicles and combinations which (1) have two axles and a gross vehicle weight or registered gross vehicle weight over 26,000 pounds, (2) have three or more axles regardless of weight, or (3) are used in combination when the weight of the combination exceeds 26,000 pounds. This definition generally corresponds to that of vehicles which must register under the IRP. An IFTA state may not require fuel use tax reporting from other types of vehicles, except those based within its borders.
Allison Transmission (NYSE: ALSN) is the world's largest manufacturer of fully automatic transmissions for medium- and heavy-duty commercial vehicles and medium- and heavy-tactical U.S. defense vehicles, as well as a supplier of commercial vehicle propulsion solutions, including electric hybrid and fully electric propulsion systems. Allison products are used in a wide variety of applications, including on-highway trucks (distribution, refuse, construction, fire and emergency), buses (school, transit and coach), motorhomes, off-highway vehicles and equipment (energy, mining and construction applications) and defense vehicles (wheeled and tracked). Founded in 1915, the company is headquartered in Indianapolis, Indiana, USA. With a market presence in more than 80 countries, Allison has regional headquarters in the Netherlands, China and Brazil with manufacturing facilities in the U.S., Hungary and India. Allison also has approximately 1,500 independent distributor and dealer locations worldwide.
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