For years, relatively low truck-related taxes and fees have prompted many fleets and owner-operators to declare Oklahoma as their IRP base state. And that has prompted many other states to cry foul.
In theory, where you’re registered shouldn’t make a difference in the total fees you pay. Under the International Registration Plan, interstate truckers file quarterly mileage reports with their “base” or “home” state. The state then apportions fees according to miles traveled in each jurisdiction.
Oklahoma has tangled with other states over two issues: the use of third party addresses and first-year estimates.
In 1999 IRP ruled that truckers couldn’t use the address of a third-party service provider as their base address. The services themselves threatened to take the matter to court and many continued to openly advertise “Oklahoma licensing” as part of their service. Last year an IRP review of Oklahoma registrations in fact found one address where more than 1,600 trucking companies were supposedly based, two addresses with more than 1,400 companies, and many with hundreds of registrants.
All states, including Oklahoma, allow new registrants to estimate their mileage for the first year. Many also accept first-year estimates from owner-operators who are switching from carrier registration to their own base plates. But some states charged that Oklahoma’s lax auditing procedures enabled those new registrants to pack their estimates with mileage from low-fee states while practically ignoring high-fee states. Last summer’s review team also found what they called “a pattern of unreasonable estimated distances.”
As a result of that review, Oklahoma was ordered to come into compliance or face IRP sanctions. The state responded by adopting an IRP approved system for first-year estimates, although registrants may still submit their own estimates if they include documentation to show how the mileages were determined.
IRP clearly wasn’t satisfied. Its Board of Directors suspended Oklahoma’s voting privileges and gave it until mid February to come up with a plan that also addresses the base state issue. If Oklahoma doesn’t comply, it could lose an estimated $1 million a month in apportioned fees from other states. Moreover, other jurisdictions could refuse to accept the credentials of Oklahoma truckers.
According to Bill Johnson, a spokesman for the Oklahoma Tax Commission, a proposal is expected to be approved by the Commission sometime in the next couple of weeks and will then go to Gov. Frank Keating for his signature.
“There are a number of ways to show us that you are an established place of business,” he said. Registrants will need to have a telephone listing for the business and an actual place of business where records are available to state officials. An employee in Oklahoma probably won’t be a requirement but “usually, if you have a place of business you’re going to have employees,” he noted.
Johnson also said that the new requirements shouldn’t change tax status or the amount truckers pay in registration fees.