Authority Process - How it Works
It takes approximately 2 to 6 weeks to complete your authority process from start to finish. There areto completing your authority process: LLC, Federal, and State. Below is an explanation of each step:
- Limited Liability Company (LLC) - Approximately 3 - 7 Business Days to Complete
- Issued by the Secretary of State where the business will be located
- We start by searching all State records to determine that your desired company name is available for registration in your state
- If the business name you have chosen is available- we register the name with the Secretary of State where the business will be located
- After confirmation is received for registration, we then obtain an Employer Identification Number (EIN) for your new business. The number is usually available to use immediately to open a business bank account; however, it takes about 14 days for the number to be fully available in the IRS for purposes such filing any electronic tax return such as the 2290 (Heavy Duty Vehicle Use Tax)
- Federal - Approximately 20 Business Days to Complete
- USDOT Number
Issued by the United States Department of Transportation (USDOT), the USDOT Number is the main tracking number for your trucking company. The USDOT number registers the number of trucks, drivers, and the safety rating of your company.
- MC Number
Issued by the Federal Motor Carrier Safety Administration (FMCSA), the Motor Carrier (MC) Number is what constitutes authority to cross state lines for hire as a motor carrier. All companies transporting freight for hire are required to obtain an MC Number.
- BOC 3 Process Agents
Process agents are people designated in each state that can accept legal documents on your behalf and then return them to you in your home state. BOC 3 Process agents are a requirement to obtaining federal authority.
A carrier must obtain Liability and Cargo insurance. It is recommended that you obtain a $1,000,000 liability policy and a $100,000 Cargo policy. You will need to obtain insurance within the first two weeks after the MC number is filed to avoid any delays in your authority processing. If you fail to get insurance on file within the first 20 days then your authority application will be dismissed. If you do not obtain insurance within that year's time, you will have to start the authority process over again and repay all applicable fees.
- USDOT Number
The Unified Carrier Registration Agreement states that all motor carriers, regulated, exempt, private, interstate brokers, Freight Forwarders and leasing companies are subject to fees under the UCRA. Fees are calculated per company based on the number of commercial motor vehicles it operates. Commercial motor vehicles include the number of trucks and power units operated by the company).
The International Fuel Tax Agreement (IFTA) is for trucks with a Gross Vehicle Weight over 26,000 lbs operating interstate for-hire or interstate private. All 48 states and the Provinces of Canada participate in the IFTA program. Once registered there will be quarterly tax filings due. You are required to keep track of the mileage traveled in each state and all of your fuel purchases. Some states charge a small one time registration fee to get started but usually it is free.
The International Registration Plan (IRP) is for trucks with a Gross Vehicle Weight over 26,000 lbs operating interstate for-hire or interstate private. All 48 states and the Provinces of Canada participate in the IRP Program. The IRP covers the apportioned tags for the truck. There is a yearly fee to register and operate your truck in each state or province. The cost is dependent on the miles you run in each state or province for the year. The average cost ranges from $1000 to $3000.
- State Permits:
NY, NM, KY, & OR - These states require an extra permit to operate within their borders. Once registered there will be tax filings due based on the miles traveled in each of these states.
- NY - $15 per truck registration fee and quarterly reporting of mileage.
- NM - $0 registration fee and quarterly reporting of mileage.
- KY - $0 registration fee and quarterly reporting of mileage.
- OR - $2000 cash deposit or security bond to register. The cash or bond will be returned if the carrier stays compliant for the initial 24 months.
After registering the carrier is required to file monthly mileage reports.