Trucking regulatory and business licensing requirements
Conformitate27 septembrie, 2022|Actualizatseptembrie 27, 2023

Trucking regulatory and business licensing requirements

The trucking industry is heavily regulated by all levels of government — federal, state, and local. If you operate a trucking company, achieving and maintaining compliance with business license and registration requirements can be a time-consuming process.

Requirements can also vary greatly depending on whether your trucks travel within a state or interstate, the cargo you transport, and the gross vehicle weight rating (GVWR) of your fleet.

In this article, we outline trucking regulatory and business licensing requirements that impact your trucking company.

About the Federal Motor Carrier Safety Administration (FMCSA)

The Federal Motor Carrier Safety Administration (FMCSA) is the federal government agency responsible for regulating and providing safety oversight of commercial motor vehicles.

The FMCSA ensures safety in motor carrier operations through the enforcement of safety regulations. They also work closely with federal, state, and local enforcement agencies, the motor carrier industry, labor and safety interest groups, and others.

FMCSA registration process

If you operate a commercial trucking company or haul cargo — either intrastate or interstate — your business must be registered with the FMCSA and obtain a USDOT number. These steps must be completed before you commence operations.

To register with the FMCSA, you must apply through their Unified Registration System (URS). This process includes the following steps:

  • Obtaining a USDOT number: This is a unique identifier that USDOT uses to collect and monitor a company’s safety information during audits, crash reviews, compliance reviews, etc. In addition to being federal law, some states also require that intrastate carriers obtain a USDOT number.
  • Authority to operate: Operating authority dictates the type of operation a company may run and the cargo it may carry. If you transport passengers in interstate commerce or federally-regulated commodities owned by others – for a fee or other compensation – you must demonstrate that you have interstate operating authority (also known as a Motor Carrier Docket Number or MC number). Depending on the type of authority that is granted, FMCSA operating authority is often identified as an “MC,” “FF, or “MX” number. Unlike a USDOT number, you may need to obtain multiple operating authorities to support your operations.

Once the FMCSA has reviewed and accepted your application, before the administration can grant operating authority, you must comply with additional requirements. These include:

  • Process Agent Designation (BOC-3 form): An SOP agent or process agent for FMCSA is essentially an individual or business organization appointed by your trucking business who is authorized to receive legal documents on the principal’s behalf. The process agent for your trucking firm must file form BOC-3 with the FMCSA online. A little more about process agents:
    • A process agent must be physically located in each state in which you are authorized to operate and be available at that address during normal business hours.
    • All commercial carriers must appoint a service of process agent in all 48 contiguous states as well as the District of Columbia.
    • Only one completed form can be on file with the FMCSA.
    • You may appoint a process agent for individual states or appoint a blanket process agent that covers every state. Appointing a blanket agent can help consolidate your company’s FMCSA obligations.
  • Proof of insurance: The type of operating authority your trucking business requests will impact the type and level of insurance required by the FMCSA. To show proof of insurance, your insurance company must submit liability and insurance forms online. The FMCSA does not furnish copies of insurance forms.

Note: If you fail to comply with the FMCSA application requirements within a designated time, your application will be dismissed.

Once you receive a certificate of operating authority from the FMCSA, you can begin legal operations. It typically takes 25 days for the certificate to be issued unless the agency requires further review.

Your FMCSA regulatory requirements don’t stop there. This involves updating your information every two years, even if the information hasn’t changed, your company has ceased interstate operations since the last update, or is no longer in business and you did not notify the FMCSA.

In addition, if you change your company name, address, or other details on record you should update your FMCSA and USDOT records in a timely manner.

Additional federal and state licenses, permits, and registrations for trucking

Examples of other licenses, permits, and registrations that your trucking business might need, include:

  • Unified carrier registration (UCR): A UCR is required if your business operates a commercial vehicle that weighs more than 10,000 pounds, you carry hazardous materials, or if you transport more than 10 passengers (including the driver) across interstate lines. If your business has operations in Canada, Mexico, or any other country that crosses into the U.S. you are also subject to the UCR requirements. UCR requires that your company pays an annual registration fee based on the number of vehicles in your fleet. You can register through the UCR website.
  • FMCSA hazardous materials safety permit: If you transport hazardous materials, interstate or intrastate, you must obtain an FMCSA Hazardous Materials Safety Permit (HMSP).
  • PHMSA registration: If your transport certain quantities and types of hazardous materials and waste, you must also file an annual registration statement with the USDOT and pay a fee. Furthermore, if you have an HMSP you must also file for a Pipeline and Hazardous Materials Safety Administration (PHMSA) registration.
  • International registration (IRP) license plate: IRP is a cooperative agreement that regulates commercial vehicles traveling within the U.S. and most Canadian provinces. File an application for an IRP in the jurisdiction where you are based.
  • International Fuel Tax Agreement (IFTA) permit: This simplifies the reporting of fuel used by trucks and allows your trucking business to have a single fuel license. To maintain the license, you are required to file quarterly fuel use tax returns in the state where your business is registered
  • Heavy highway use tax return (Form 2290): If you have registered or are required to register a heavy highway motor vehicle with a taxable gross weight of 55,000 pounds or more at the time of first use during a reporting period, you must file Form 2290, Heavy Highway Vehicle Use Tax Return with the IRS.
  • Standard carrier alpha code (SCAC): This is a unique two- or four-letter code used to identify transportation companies who plan to transport government, military, international, or intermodal loads. Obtain your SCAC code from the National Motor Freight Traffic Association (NMFTA).
  • Commercial driver’s license: To operate heavy trucks, your company drivers require valid commercial driver’s licenses (CDLs). Obtaining a license involves an extensive background check, CDL training, a written permit exam, and a driving test. To be eligible for a CDL, your drivers must be at least 18 years old (21 to drive a truck from state to state). Each state has different testing standards for CDLs.

Miscellaneous state requirements. State trucking regulations tend to be geared more toward intrastate/in-state companies but may also affect interstate/out-of-state companies. These are regulated by Departments of Transportation, Highway Safety Agencies, and/or Departments of Motor Vehicles. If your business operates within a state, check what permits or registrations may be required. For example, you may need the following:

  • State motor carrier permit/registration: If you operate intrastate you may need to register your operations or obtain a permit with that state’s motor carrier division before traveling into that state. This could also apply to out-of-state commercial vehicles.
  • Oversize/overweight permit: Some states require trucking companies who travel through their states to obtain additional permits if they exceed the state’s legal size or weight limits.

Requirements for doing business

There are many licensing, permit, and tax registrations that may be imposed on a business. Here are some common registration and licensing requirements for a trucking company:

  • Business formation: Forming an LLC or corporation by registering with the Secretary of State.
  • Basic business operation license: This is a license from the city in which your business will operate, or from the local county (if the business will be operated outside of the city's legal boundaries).
  • Federal tax ID (EIN) number: Issued by the IRS, the EIN is also called a tax identification number or employer identification number and is required for almost all types of businesses.
  • State tax ID number: Issued by your state’s department of revenue or taxation, the state tax ID number is also called a tax registration number.
  • DBA/fictitious business name registration: The doing business as (DBA) or fictitious business name registration happens with the appropriate state or local jurisdiction.
  • Zoning and land use permits: Local governments’ zoning laws may prohibit certain business activity in designated areas.
  • Building permit: If you plan on remodeling or building a commercial space, you'll need to get a building permit.
  • Workers’ comp insurance: In the vast majority of states, workers' compensation coverage is mandatory if you have at least one employee.

CT can help

Outsourcing business registration and license research, applications, management, and renewals can help you take the pressure off internal resources. By working with a full-service management provider who specializes in the efficient processing of business licenses, permits, and registrations and simplifying FMCSA compliance you can free up your time to focus on starting and growing your trucking company while ensuring you keep up with changing compliance requirements.

For more information on CT Corporation services and how we can streamline your business licensing, contact a CT Corporation business license specialist.

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