Beginning November 18, 2024, all State Driver Licensing Agencies will be required to suspend or downgrade the commercial driving privileges of any driver with a "prohibited" status in the FMCSA's Drug and Alcohol Clearinghouse. This change is part of the FMCSA's ongoing effort to improve road safety and ensure that only qualified drivers are eligible to operate commercial motor vehicles (CMVs). What Does This Mean for CDL Drivers? If a driver has status as "prohibited" in the Clearinghouse, their CDL will be downgraded, meaning they will lose their commercial driving privileges. The downgrade will remain in effect until the driver completes the return-to-duty process. This new rule aims to prevent drivers who have violated the drug and alcohol regulations from operating CMVs until they have proven they are safe to return to duty. While the official compliance date is November 18, 2024, many states have already begun implementing these changes. This proactive approach is part of a broader effort to enhance safety across the commercial trucking industry.

Benefits of Having a Safety Consultant: A Reliable Contact for Any Questions or Issues Expertise in Compliance Risk Management Enhanced Training Programs Consultants work with many carriers, so you can benefit from their broad experience and insights gained from working with a diverse range of clients. Improved Safety Culture Accident Prevention Cost Savings Improved Reputation Support for your Safety Management team Trucking industry regulations are complex and ever-changing. From Hours of Service (HOS) rules to Drug and Alcohol (D&A) testing requirements, compliance can be overwhelming. Safety consultants are experts in these regulations and ensure that the company stays compliant with federal, state, and local laws. Their knowledge helps prevent costly fines, penalties, and potential shutdowns. Safety consultants specialize in identifying and mitigating risks. They conduct thorough risk assessments to pinpoint potential hazards within the company’s operations. By addressing these risks proactively, trucking companies can reduce the likelihood of accidents, injuries, and property damage. This not only protects employees but also safeguards the company’s assets and reputation. Safety consultants work closely with management and employees to instill the importance of safety in everyday operations. This cultural shift leads to better communication, increased accountability, and a collective commitment to safety. A strong safety culture ultimately results in fewer accidents and a more productive workforce. In the unfortunate event of an accident, safety consultants are invaluable in conducting thorough investigations. They analyze the root causes of accidents and provide recommendations to prevent future occurrences. By understanding what went wrong, companies can implement corrective actions and improve their safety protocols. Investing in safety consultants may seem like an additional expense, but it is a cost-saving measure in the long run. By reducing accidents and compliance violations, companies save on insurance premiums, legal fees, and repair costs. Additionally, a safe and compliant operation minimizes downtime, ensuring that the company can continue to operate efficiently. A strong safety record enhances a company’s reputation within the industry. Clients, partners, and stakeholders are more likely to trust and engage with a company known for its commitment to safety. This positive reputation can lead to increased business opportunities and long-term success. Safety consultants provide valuable support to the company’s existing safety management team. They bring fresh perspectives, innovative solutions, and best practices from the industry. This collaboration enhances the overall effectiveness of the safety management program and ensures that it evolves with the changing landscape of the trucking industry.

What Must Be Done? Drug and Alcohol Testing Policy in place. Employers must develop a written drug and alcohol testing policy and distribute it to all employees. The policy should outline testing procedures, consequences of testing positive, and employee rights. Pre-Employment Drug Testing. All new hires must undergo a drug test before performing any safety-sensitive functions. A negative result is required to proceed with employment. Random program. Employees are selected randomly to undergo testing. This must be done on an ongoing basis throughout the year. The annual minimum drug and alcohol random testing rates are established within FMCSA for 2024: 50% Random Drug Testing Rate; 10% Random Alcohol Testing Rate. Training . If you employ drivers then supervisors must receive at least 60 minutes of training on recognizing the signs of drug use and 60 minutes on recognizing the signs of alcohol misuse. Types of Tests Pre-Employment Testing. Conducted before a new employee begins performing safety-sensitive duties. Random Testing. Employees are selected randomly to undergo testing. This must be done on an ongoing basis throughout the year. Reasonable Suspicion Testing. Conducted when a trained supervisor observes signs of drug or alcohol misuse. Post-accident testing. Required after certain accidents. Drug Testing: Within 32 hours. Alcohol Testing: Within 2 hours, if not document the reason and conduct within 8 hours. Return-to-Duty Testing. Required after a driver has violated the drug and alcohol testing regulations and has completed the necessary treatment. Follow-up testing. Conducted after a driver returns to duty following a violation. The number and frequency of tests are determined by a Substance Abuse Professional (SAP). (Note: Do not confuse this with a driver returning to work after vacation!) Random Consortium Small fleet motor carriers can join a consortium to manage the random testing pool, ensuring a sufficient number of drivers are tested. That means you will be in the same pool with other employers. The Consortium/Third-Party Administrator (C/TPA) selects drivers randomly, ensuring the process is unbiased. If you have a larger fleet, employers have the option to establish their own stand-alone pools for random drug and alcohol testing. This means that the employer manages their own random testing program internally, selecting employees for testing in a manner that ensures each employee has an equal chance of being tested each time selections are made. The selection process must be computerized to ensure randomness and fairness. This approach provides greater control and customization over the testing process, allowing employers to tailor their random testing procedures to their specific operational needs and schedules. Stand-alone pools also ensure that testing is conducted consistently and in compliance with FMCSA regulations, reinforcing the commitment to a drug- and alcohol-free workplace. However, managing a stand-alone pool requires a robust administrative framework to handle the computerized selection process, maintain accurate records, and ensure compliance with all regulatory requirements. You may consider a hiring Drug and Alcohol Testing Management Service or Drug and Alcohol Testing software to make compliance easier. Record Keeping Employers must maintain records of all test results, both positive and negative. Maintain Custody and Control Form Copies Documentation of supervisor training on drug and alcohol misuse must be kept. A copy of the written drug and alcohol policy and proof of distribution to employees. Employers must prepare an annual summary, called MIS report, of the results of their drug and alcohol testing program and submit it to the FMCSA when required.

Limited Liability Company (LLC) A Limited Liability Company (LLC) is a hybrid business structure that combines the flexibility of a partnership with the liability protection of a corporation. It is relatively easy to set up and offers a high degree of flexibility in management and taxation. Advantages Owners (called members) are protected from personal liability for business debts and claims, meaning personal assets are generally safe if the business incurs debt or is sued. Additional forms must be submitted to IRS to be elected as S Corp. Can be elected as S Corp to avoid double taxation May have multiple owners (called members) Easy to form; easy to dissolve Disadvantages Cannot be publicly traded. In some states, you can't have an LLC with just one person. You need at least two members to form an LLC. Members may be subject to self-employment taxes on their share of the profits, which can be higher than corporate taxes. In many states, an LLC may dissolve if a member leaves or passes away, unless provisions are made in the operating agreement. LLC laws vary significantly from state to state, which can create complexities for businesses operating in multiple states. Corporation A Corporation is a more complex business structure, legally separate from its owners (called shareholders). Corporations can raise capital through the sale of stock and are often subject to more regulations and formalities C Corp A C Corporation, commonly referred to as a C Corp, is one of the most recognized business structures in the United States. It offers distinct advantages, particularly for larger businesses or those seeking to raise capital. Advantages Shareholders have limited liability, meaning they are not personally responsible for the corporation’s debts and liabilities. C Corporations can raise funds by issuing shares of stock, which can attract investors. This makes it easier to secure large amounts of capital for expansion. There is no limit to the number of shareholders, and ownership can include foreign nationals and other businesses. C Corporations can deduct business expenses, including salaries, bonuses, and benefits, which can lower the overall tax burden. Disadvantages One of the biggest drawbacks is double taxation. The corporation’s profits are taxed at the corporate level, and dividends distributed to shareholders are taxed again on their personal tax returns. Establishing and maintaining a C Corporation involves more legal and administrative costs, including fees for incorporation, annual reports, and compliance with various regulations. C Corporations are subject to more stringent regulatory requirements, including regular meetings of the board of directors and shareholders, and detailed record-keeping. Because ownership is divided among shareholders, founders and initial owners might lose some control over the company as they sell shares to raise capital. S Corp An S Corporation, or S Corp, is a unique type of corporation in the United States that combines the benefits of a corporation with the tax advantages of a partnership. Named after Subchapter S of the Internal Revenue Code, an S Corp can be an attractive option for small to medium-sized businesses. Advantages One of the primary benefits is that S Corps avoid double taxation. Corporate income is not taxed at the entity level but is passed through to shareholders and taxed at their individual rates. Shareholders are shielded from personal liability for business debts and obligations, protecting their personal assets. S Corps can raise capital by selling shares, although they are limited to 100 shareholders. This can be beneficial for attracting investment while maintaining control. Shareholder-employees can take a reasonable salary and receive the remaining income as distributions, which are not subject to self-employment tax. The corporation continues to exist even if ownership changes or shareholders leave or pass away. Disadvantages The 100-shareholder limit and requirement that all shareholders be U.S. citizens or residents can limit growth and investment opportunities. The IRS closely monitors S Corps to ensure that reasonable salaries are paid to shareholder-employees to prevent abuse of the pass-through taxation benefit. S Corps can only issue one class of stock, which may limit flexibility in structuring investment deals. Like C Corporations, S Corps must adhere to corporate formalities, including holding meetings, keeping detailed records, and filing annual reports. Some states do not recognize S Corp status and may tax the corporation as a C Corporation. Additionally, some states impose their own taxes on S Corps.

New York (NY) Highway Use Tax (HUT) and Automotive Fuel Carrier (AFC) Permits New York requires certain vehicles to obtain a Highway Use Tax (HUT) permit. This permit is mandatory for trucks, tractors, and other commercial vehicles with a gross weight of over 18,000 pounds. The HUT permit allows vehicles to travel on public highways within the state. For vehicles transporting automotive fuel, an Automotive Fuel Carrier (AFC) permit is required. This ensures that the transport of fuel complies with state regulations regarding taxation and environmental safety. Temporary permit issued until you receive a permanent one by mail Decal issued for each unit. Decal # assigned for certain units. Delivered by mail within 3-4 weeks after the permit purchase. Tax filings based on miles traveled in NY for each vehicle. Monthly, Quarterly, or Annaly, determined by the NY Department of Taxation and Finance depending on NY highway usage. Decal must be attached to the vehicle; the permit must be carried in the vehicle documents folder. New Mexico (NM) Weight Distance Tax Permit New Mexico imposes a Weight Distance Tax (WDT) on vehicles weighing over 26,000 pounds. To comply, trucking companies must obtain a Weight Distance Tax Permit. This permit requires carriers to report the miles traveled within the state and pay taxes accordingly. The tax rate varies based on the weight of the vehicle and the miles traveled. Permit is not required to be carried in the vehicle documents folder as long as you have the truck entered in the system. You cannot add a vehicle to your account if another permit exists for the same vehicle in someone's account. Quarterly tax filing based on miles traveled in NM for the fleet. Kentucky (KY) Kentucky Highway Use Tax (KYU) Permit Kentucky mandates that commercial vehicles with a gross weight of 60,000 pounds or more obtain a Kentucky Highway Use Tax (KYU) permit. This permit obligates carriers to report and pay taxes based on the miles traveled within the state. The KYU permit helps fund the maintenance and development of Kentucky's highways. Online permit only, meaning you enter the vehicle in your system that will satisfy having a permit to travel to KY. Quarterly tax filing based on miles traveled in KY for the fleet. Connecticut (CT) Connecticut Highway Use Fee Connecticut requires a Highway Use Fee for trucks with a gross weight exceeding 26,000 pounds. This fee is based on the miles traveled within the state. The Highway Use Fee aims to generate revenue for the upkeep of Connecticut's road infrastructure and ensure that heavy vehicles contribute to the costs of road maintenance. Company-wide permit Quarterly tax filing based on miles traveled in CT for the fleet. California (CA) Motor Carrier Permit (MCP) In California, trucking companies must obtain a Motor Carrier Permit (MCP) from the California Department of Motor Vehicles (DMV). The MCP is required for motor carriers operating commercial vehicles over 10,000 pounds gross vehicle weight. The permit ensures that carriers comply with state regulations regarding safety, insurance, and financial responsibility. If you have a pick-up in CA and delivery in CA, you need permit. Company-wide California Air Resources Board (CARB) Compliance In addition to the MCP, trucking companies operating in California must comply with the California Air Resources Board (CARB) regulations. CARB sets stringent emissions standards to reduce air pollution. Carriers may need to retrofit or replace older vehicles to meet these standards and obtain necessary CARB certifications. Company-wide Each truck has to be added to account; vehicle engine manufacturer information is required Clean Truck Check The California Clean Truck Program is part of the broader effort by the California Air Resources Board (CARB) to reduce greenhouse gas emissions and other pollutants from heavy-duty vehicles. The program focuses on ensuring that trucks operating within the state meet specific emissions standards, promoting the use of cleaner technologies and fuels. Each truck has to be added and compliant Fleet-wide affirmation is issued when each vehicle is compliant and all fees are paid Oregon (OR) Oregon Weight-Mile Tax Oregon imposes a Weight-Mile Tax on commercial vehicles with a gross weight of over 26,000 pounds. Trucking companies must obtain a Weight-Mile Tax permit to operate within the state. The tax is calculated based on the weight of the vehicle and the miles traveled on Oregon roads. The revenue collected helps maintain and improve the state's transportation infrastructure. Trip permits. If you have a few trips to OR a year best option is to get a trip permit for each trip. Price will be determined based on mileage that you are planning to travel in OR Permanent account. If you constantly operating in OR, open a permanent account that allows you to add each vehicle and not worry about permits per trip. Monthly tax filings will be required, based on miles traveled; OR requires a bond, an amount determined based on the number of vehicles in your OR account; the bond may be increased if the fleet increases. The bond may be refunded after a year if no late payment and no account suspensions.

What is HVUT? The Heavy Vehicle Use Tax (HVUT) is a federal tax imposed on vehicles operating on public highways with a gross weight of 55,000 pounds or more. The tax is used to fund highway maintenance and infrastructure projects. The tax is reported and paid using IRS Form 2290. Who Needs HVUT? HVUT applies to: Vehicles with a gross weight of 55,000 pounds or more. Commercial vehicles used on public highways, such as trucks, tractors, and buses. Requirements to Get HVUT To file Form 2290 and pay HVUT, you need to: Have Employer Identification Number (EIN) Provide detailed information about each vehicle, including Vehicle Identification Number (VIN), gross weight, and first month of use. When is HVUT Due? It is pre-paid tax. The HVUT tax year runs from July 1 to June 30 of the following year. The due dates are as follows: Annual Filings Form 2290 must be filed, and the tax paid by August 31 for vehicles in use during July. Newly Purchased Vehicles If a vehicle is put into service after July, Form 2290 must be filed, and the tax paid by the end of the month following the month the vehicle was first used. If you did not file Form 2290 on time, you can still complete the form and obtain the stamped Schedule 1, which is necessary for vehicle registration. However, you should be aware that the IRS will send you penalties for late filing. These penalties include additional charges and interest on the overdue tax amount. It is important to file as soon as possible to minimize these penalties. Documentation Once Form 2290 is filed and the tax is paid, you will receive a stamped Schedule 1 (proof of payment), which is required for vehicle registration.

The International Fuel Tax Agreement (IFTA) is a cooperative agreement among U.S. states and Canadian provinces to simplify the reporting of fuel use by motor carriers that operate in multiple jurisdictions. Under IFTA, carriers file a single quarterly fuel tax report with their base jurisdiction, which then distributes the taxes owed to the appropriate jurisdictions. Who Needs IFTA? IFTA is required for commercial motor vehicles that operate in two or more IFTA jurisdictions and meet the following criteria: Have two axles and a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds Have three or more axles, regardless of weight Are used in combination with a trailer that brings the gross vehicle weight over 26,000 pounds Exemptions: Recreational vehicles, such as motorhomes, are typically exempt if they are used for personal travel. Common Requirements to get IFTA license Proof of Residency State specific application Company and owners' information When is IFTA Due? IFTA requires quarterly tax returns to be filed, which are due on the following dates: Quarter 1 (January - March): Due April 30 Quarter 2 (April - June): Due July 31 Quarter 3 (July - September): Due October 31 Quarter 4 (October - December): Due January 31 If the due date falls on a weekend or legal state holiday, the return is due on the next business day. IFTA Decals IFTA decals are required to be displayed on each qualified vehicle. Here are the requirements for IFTA decals: Decals must be placed on both sides of the cab. Decals are valid for one calendar year (January 1 to December 31). If decals are lost or damaged, replacements must be obtained. New decals must be applied for and affixed each year as part of the renewal process.

What is an IRP? The International Registration Plan (IRP) is a registration reciprocity agreement among the contiguous U.S. states, the District of Columbia, and Canadian provinces. The agreement allows commercial motor carriers to register their vehicles in their home state and obtain one license plate and one cab card (registration) that are valid across all IRP jurisdictions. This simplifies the process of operating interstate and internationally, as carriers no longer need to register their vehicles separately in each state or province they operate in. The IRP aims to promote and facilitate the efficient and effective exchange of registration fees among member jurisdictions. This is based on the proportion of miles traveled in each jurisdiction. Under the IRP, commercial carriers can register their vehicles in one base jurisdiction, where they are based and maintain their operational records. This registration allows them to operate in all IRP jurisdictions without needing separate registrations. What are the fees? Registration fees are apportioned based on the percentage of miles traveled in each jurisdiction. For instance, if a vehicle travels 40% of its miles in State A and 60% in State B, the registration fees will be distributed accordingly. Who Needs IRP? Apportionment is required for vehicles operating in two or more IRP‐member jurisdictions that have combined gross weight of more than 26,000 pounds, including the weight of the vehicle and the maximum load; or have three or more axles, regardless of weight. Exemptions. Some vehicles may be exempt from IRP registration, such as government-owned vehicles, city pick-up and delivery vehicles, recreational vehicles, and vehicles displaying restricted plates (like farm vehicles). Common Requirements to get IRP Proof of Residency. You must provide evidence of residency or business location in the base jurisdiction where you are registering. Vehicle Information. Detailed information about each vehicle, including Vehicle Identification Number (VIN), make, model, and weight; copy of the title. Mileage Records. Accurate records of mileage traveled in each jurisdiction(if applicable). Proof of Insurance. Some states require valid proof of insurance for each vehicle. Highway Use Tax - HUT 2290 form Schedule 1. Proof of Payment. Owners' ID . Some states require the owner to be a resident of the state where the IRP is being established. State specific applications. Motor Carrier responsible for safety information. When is IRP Due? The IRP registration period typically spans one year. The due date for IRP registration and renewals varies by jurisdiction but is commonly aligned with the anniversary month of the initial registration. IRP Renewal Do not delay with renewal, some states suggest to submit renewal documentation 3 month prior to expiration. Common requirement for renewal: Mileage Records . Accurate records of mileage traveled in each jurisdiction(if applicable). Proof of Insurance. Some states require valid proof of insurance for each vehicle. Highway Use Tax - HUT 2290 form Schedule 1. Proof of Payment. State specific applications. Motor Carrier responsible for safety information.

What are Safety Ratings? Safety ratings are evaluations of a motor carrier's compliance with federal safety regulations. These ratings are determined through a compliance review process outlined in 49 CFR 385, Appendix B. The FMCSA can issue one of three safety ratings: Satisfactory, Conditional, or Unsatisfactory. It's important to note that not all investigations result in a safety rating. The Three Types of Safety Ratings 1. Satisfactory Safety Rating - A Satisfactory rating indicates that a motor carrier possesses functional and adequate safety management controls that comply with the safety fitness standards prescribed in 49 CFR 385.5. This rating is reflective of a carrier that has appropriate safety measures in place, suitable for the size and type of operation. 2. Conditional Safety Rating - A Conditional rating is given to carriers that lack adequate safety management controls necessary to meet the specified safety fitness standards. This could potentially lead to compliance issues as detailed in 49 CFR 385.5 (a) through (k). 3. Unsatisfactory Safety Rating - An Unsatisfactory rating is issued when a motor carrier's lack of adequate safety management controls has resulted in occurrences that violate the safety fitness standards. This is a serious rating that can affect the carrier's operations and business relationships. 4. Unrated - Sometimes, a motor carrier may remain Unrated, meaning that FMCSA has not assigned any safety rating. This occurs when a Rated Investigation does not lead to a definitive evaluation. Impact of Safety Ratings Safety ratings are more than just a regulatory measure; they significantly impact a carrier’s business operations. These ratings are publicly available through the SAFER Website, allowing shippers, brokers and consumers to make informed decisions about which carriers to engage for their shipping needs. A Satisfactory rating can enhance a carrier's reputation and business prospects, while a Conditional or Unsatisfactory rating might deter potential business partners and require immediate remedial actions to address the deficiencies. For motor carriers, maintaining a Satisfactory safety rating is crucial. It not only ensures compliance with FMCSA regulations but also bolsters business opportunities and trust with clients. Carriers with less-than-satisfactory ratings should take prompt actions to improve their safety management controls and consider re-evaluation by the FMCSA to improve their rating. Understanding and actively managing the factors that contribute to these ratings can significantly impact the success and sustainability of carriers in the competitive transportation industry. For those involved in or reliant on the transportation industry, keeping abreast of these ratings and their implications is essential for ensuring safety and compliance in all logistical operations. Worried About Your Audit? If you're concerned about your safety audit outcomes or currently hold a Conditional rating, our team is here to assist you. We offer comprehensive audit support services, including compliance document preparation and policy review to help you meet FMCSA standards. Enhance your safety management controls and improve your safety rating with our expert guidance.