What leases have some regulatory relief?

• Leases that are conducted between two for-hire carriers or a private carrier leasing to a for-hire carrier have simplified requirements.
• The company operating the vehicle is responsible for compliance.
• All roadside inspection violations, citations, vehicle inspections, accidents, belong to the carrier – not to the leasing company, staffing agency or 3rd party provider.

Carriers cannot borrow equipment from one another and maintain an “arm’s length agreement,” without the benefit of a lease or similar agreement.

When services or assets are received at no cost or under their true value, there may be tax consequences. To determine if the services are undervalued, the Internal Revenue Service (IRS) uses the concept of an “arm’s length standard.”

Because of the unique nature of the transaction, the FMCSA allows a simplified lease agreement.

Leases that are conducted between two for-hire carriers or a private carrier leasing to a for-hire carrier have simplified requirements which include:

• The need to mark self-propelled commercial motor vehicles in accordance with 49 CFR 390.21 (link to the marking topics and the regulation reference.)
• The need to either carry the lease on the vehicle or a statement created by the carrier containing:
  • Equipment is being operated by the carrier,
  • Owner of the equipment’s name,
  • Date and length of the lease,
  • Any commodity restrictions, and
  • Address where the original lease is retained by the carrier.
• There is an agreement in place that:
  • Is signed by authorized representatives the lessee and lessor,
  • The document calls out “that control and responsibility for the operation of the equipment shall be that of the lessee from the time possession,”
  • An equipment receipt is provided indicating:
    • Identity of the equipment, e.g. VIN
    • The date and time received, and
    • Date and time returned

The company operating the vehicle is responsible for compliance. All roadside inspection violations, citations, vehicle inspections, accidents, belong to the carrier – not to the leasing company, staffing agency or 3rd party provider.

The responsible carrier’s name and USDOT number need to be on the vehicle or, if a short-term rental, the qualifiers of the marking exception of �390.21(e) met.