a business meeting discussing apportioned plates and IRP registration and how this can help title a commercial fleet of vehicles
ComplianceFinanceAugust 03, 2022

Apportioned plates, IRP registration, and IFTA explained

Apportioned plates, the International Registration Plan (IRP), and the International Fuel Tax Agreement (IFTA) are all terms you will regularly come across in commercial motor vehicle registrations.

As a lender, you need to understand the complexities of interstate and international transportation — or risk leaving your interest unsecured and consequently bear the cost of an unperfected lien if a borrower fails to properly register their vehicle. 

Nowhere is this more important than for customers in control of commercial motor vehicle fleets — where registration is more complicated. Commercial owners have to consider the impact of working across multiple jurisdictions and each state or provinces' various registration requirements, fees, and taxes. With so many factors to consider, the cost of unperfected liens can be significant — making it vital that you help them complete their responsibilities after their purchase.

To increase the likelihood of motor carriers perfecting your liens, you can help them navigate the registration process. But this requires you to understand three of the most critical elements: apportioned plates, IRP registration, and IFTA.

What is the International Registration Plan (IRP)?

The IRP is a reciprocity agreement among 48 continental United States, the District of Columbia, and 10 Canadian provinces. It enables fleets to register automobiles in one home location and pay apportioned licensing fees based on how much they operate in each jurisdiction.

Your customers aren't required to register with the IRP, but it's beneficial to do so if they regularly operate in two or more states or provinces. Motor carriers can register qualified vehicles in one place — where they file as doing business — instead of each in the jurisdiction where they operate.

Otherwise, owners must obtain trip permits each time a vehicle ventures into a state or province outside the fleet's home base — or risk incurring potentially significant fines for operating somewhere they haven't registered and paid taxes.

Apportioned registration and IRP registration

The IRP registration is also known as apportioned registration.

Apportioned registration is the official registration motor carriers complete in their home state or states. Once completed, vehicles may move throughout several jurisdictions without multiple registrations or trip permits.

Although fleets register cars or trucks in one jurisdiction, an apportioned registration means they pay fees in each state and/or province where they operate. Most importantly, their payments are proportional to the number of miles a vehicle logs in each place. 

What does apportioned mean? 

To apportion means to create a proportionate distribution. Something proportional is directly related to a particular measurement; in this case, costs are calculated based on the number of miles the fleet's vehicles operate in each state or province.

Fleets multiply the percentage they travel in one place by that jurisdiction's fee. For example, if a motor carrier does 25 percent of its business in Texas, then the company multiplies Texas' price by .25 to determine how much it owes. However, the final calculation is more complicated since it takes factors such as registration date, taxes, and fees into consideration.

What are apportioned plates?

To get an apportioned plate, commercial vehicles must first have their apportioned registration. States then issue apportioned license plates to affix to each vehicle. These plates are specifically labeled "Apportioned," "APP," or "PRP." The apportioned plate is honored by all states and participating Canadian provinces and is renewed annually.

States also issue Cab Cards, which remain with commercial cars and trucks, and say which jurisdictions they can lawfully go to without additional trip permits or incurring fines.

How do you apply for apportioned plates?

For apportioned license plate registration, you will need to comply with the following:

  1. Get a Federal Motor Carrier Safety Administration (FMCA) authorization. Companies that operate commercial vehicles transporting passengers or hauling cargo in interstate commerce must be registered with the FMCSA.
  2. Have a U.S. Department of Transportation (USDOT) number. If you transport cargo interstate or haul hazardous materials intrastate and are required to carry a safety permit, you must register for a USDOT number. Apart from federal regulations, some states require their intrastate commercial motor vehicle registrants to obtain a USDOT number.
  3. Secure an IFTA permit. This permit simplifies the reporting of fuel used by motor carriers operating in multiple jurisdictions and allows your commercial vehicle business to have a single fuel license. Refer to your state’s IFTA Department to secure your permit. 
  4. Complete relevant forms. Check with your local IRP office for the full list of forms and supporting documents required for apportioned license plate registration.

You can only apply for an apportioned license plate after setting up both IRP and IFTA accounts.

What is International Fuel Tax Agreement (IFTA)?

Both IRP and IFTA accounts are required for vehicles traveling between two or more member jurisdictions and exceeding 26,000 pounds (gross vehicle weight) or having three or more axles.

IRP and IFTA registrations are also required for vehicles used, designed, and maintained to transport persons for hire or property.

Exceptions for IRP registrations are:

  • Recreational vehicles
  • Vehicles displaying restricted plates, and
  • Government-owned vehicles

Let us navigate IRP registration for you

It's simply good business to help your borrowers properly register commercial vehicles that travel through several states or provinces; it's an essential step when it comes to securing your interests. But apportioned registration isn't a simple process; each state has unique fee schedules, costs, taxes, and procedures regarding altering registered gross vehicle weights and fleet management. Keeping up with 59 jurisdictions' rules and procedures is a monumental task outside of your core competencies.

The best way to tackle this endeavor successfully is to find the right partner offering the right services. Lien Solutions has extensive knowledge regarding registration requirements and accurate tax and fee estimates across jurisdictions. We've become experts in vehicle titling and registration, so you don't have to.

We're here to help your titling process go smoothly, no matter where your customer’s fleet operates. Speak with one of our experts today by calling (800) 833-5778, x3.

Lien Solution's Marina Hardy
Senior Marketing Manager
Marina Hardy is Senior Marketing Manager for Wolters Kluwer Lien Solutions. Her expertise is in program management, solutions marketing, product management, operations, customer experience, market research, and analytics.
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