Do you operate interstate or intrastate? The answer may surprise you
It seems like a fairly straightforward issue. Interstate transportation involves a vehicle crossing borders and operating in two or more jurisdictions; if a truck never leaves a state, it must be performing intrastate motor carriage.
Surprisingly, this is not always true. The FMCSA provides the definition of interstate transportation in 49 CFR 390.5. Any evaluation of interstate or intrastate begins with this definition:
Interstate commerce means trade, traffic, or transportation in the United States:
- Between a place in a State and a place outside of such State (including a place outside of the United States);
- Between two places in a State through another State or a place outside of the United States; or
- Between two places in a State as part of trade, traffic, or transportation originating or terminating outside the State or the United States.
The first two parts of this definition are pretty clear — a vehicle crossing a border means interstate commerce.
It is the third part of the definition that complicates things — interstate commerce is trade, traffic, or transportation involving the crossing of a state boundary. When either the vehicle, its passengers, or cargo cross a state boundary, or there is intent to cross a state boundary, the carrier is considered an interstate carrier.
The FMCSA does offer some clarification with this guidance in 49 CFR 390.3 General Applicability:
- Question 6: How does one distinguish between intra- and interstate commerce for the purposes of applicability of the FMCSRs?
- Guidance: Interstate commerce is determined by the essential character of the movement, manifested by the shipper’s fixed and persistent intent at the time of shipment, and is ascertained from all of the facts and circumstances surrounding the transportation. When the intent of the transportation being performed is interstate in nature, even when the route is within the boundaries of a single State, the driver andCMV are subject to the FMCSRs.
The bottom line is this: If your vehicles cross state lines, or if your vehicles transport cargo or passengers that have or will cross state lines, you are an interstate carrier, subject to compliance with the Federal Motor Carrier Safety Regulations. The Unified Carrier Registration Agreement (UCR) uses the same definition — if the vehicle, freight, or passengers cross states lines, it is an interstate vehicle subject to annual UCR registration.
However, when it comes to state taxation matters, such as vehicle licensing/IRP and fuel tax reporting/IFTA, the only consideration is where the vehicle itself travels.
You may be operating vehicles that are intrastate as far as IRP and IFTA are concerned, but interstate for DOT safety and UCR compliance. Correctly classifying your operation will keep you in compliance.