Oklahoma loses IRP voting rights; given until Feb. 15 to comply

| 12/14/2001

A complicated issue dealing with a motor carrier's place of business has Oklahoma under serious scrutiny by the International Registration Plan (IRP). The IRP Board of Directors has voted to suspend the state's IRP voting rights and privileges to participate on committees until the state tax commission comes up with a compliant plan.

"If you've been using Oklahoma, as a small business person, it's in your best interest to re-evaluate where you base plate out of," advises OOIDA's Gary Green. "It looks to us like the advantages of base plating in Oklahoma has come to an end."

The IRP has decided Oklahoma's rules allowing motor carriers to use a service provider in the state to establish a place of business are insufficient. The Oklahoma Tax Commission has a proposal making its way through the rulemaking process to address this issue. The IRP board has set a Feb. 15, 2002, deadline for compliance after which other states and provinces can withhold fees from Oklahoma. According to published sources, this could be as much as $1 million a month.

Oklahoma's IRP plates are due for renewal Dec. 31. This means that the enforcement date is likely to be around March 1.

OOIDA's business services department says problems are likely for owner-operators who for registration purposes use a different principle place of business other than where operating authority is registered. "We are getting calls daily," says OOIDA's Paula McGee. For instance, Wisconsin now has a new form for single state registration renewal that asks what state your IRP account is located in. If the answer is not Wisconsin, says McGee, they are going to scrutinize which is your actual principle place of business.

For some years, Oklahoma has been successful in using certain tax and licensing benefits to attract the base plate business of motor carriers and owner-operators. While many trucking companies found those benefits allowed them to save money, states where these companies had registered operating authority were deprived of income they felt belonged to them. One state, Illinois, is now asking for $15.5 million in fees it claims Oklahoma owes for the registration years 1999-2001 over Oklahoma's administration of the established place of business. Part of the claim is for revenue Illinois feels was diverted from its state coffers by Oklahoma's practice of allowing first year registrants to estimate their own miles, while most other states have pre-set miles. Oklahoma no longer does this and now has a strictly enforced estimated mileage chart in place.
--Sandi Soendker