'Fairness' at Issue in Oklahoma Base Plating Suit

| May 13, 2002

Opponents in an Oklahoma truck registration argument looked to a state court to decide a lawsuit seeking to prevent the state from changing base plate registration rules.

The Oklahoma Tax Commission issued rules in February that require trucking companies base plating in the state to maintain an actual physical address within the state rather than use the address of truck permitting services. ProCert, a truck permitting business in Oklahoma City, filed suit. On Feb. 8, a judge issued a temporary restraining order preventing the state from putting the rules into affect. A state court hearing, set to get underway March 7, was to decide the matter.

The state’s rule change is unfair, according to Newt Cunningham, an attorney with the Dallas law firm of Roberts, Cunningham & Strickland.

“This key issue is fairness. The IRP Dispute Resolution Committee hasn’t been fair. The state
of Oklahoma hasn’t been fair,” Cunningham said during a telephone interview.

“A trucking company or a trucker is supposed to have a point of contact in the jurisdiction in which he’s base plating. A point where he can be contacted by government agencies or by the public and a point where he can make his records available for public audit. And I think that can be accomplished as easily by an agent as by an employee. And what the IRP resolution committee is trying to do is eliminate a trucker’s right to use an agent. They’re basically saying you can’t use an agency you have to use an employee. And they’re saying you can’t rent office space or share office space with someone else, you have to have your own stand-alone brick and mortar.”

The state made the changes under pressure from the International Registration Plan, Inc., the entity that runs the registration-sharing plan between all 48 contiguous states and 10 Canadian provinces. The IRP Dispute Resolution Committee ruled Oklahoma in violation of the plan’s rules after the state of Illinois filed a complaint with the committee saying Oklahoma officials failed to ensure truckers registering in the state actually maintained an established place of business as specified under IRP rules. Illinois tax officials said that fleets previously registered with IRP and based in Illinois had closed their accounts in that state and changed their base to Oklahoma, which was costing Illinois “substantial revenues.”

According to an IRP peer review of Oklahoma in 2001, reviewers found as many as 1,600 IRP-registered trucking companies listing the same address. The same was true for owner-operators, with the report saying the review “identified a large volume using third-party providers as their established place of business.” Currently, owner-operators – those truckers who lease their equipment to another carrier are exempt from IRP place of business requirements.

Many truckers base plate their fleets in Oklahoma because the state is very trucker friendly with a relatively low tax burden. IRP officials did not respond immediately to request for comments, but according to IRP documents, Oklahoma’s refusal to ensure IRP registrants meet place of residence requirements is costing other jurisdictions revenue. If the new rules stand they could prove costly to out-of-state truckers registering their vehicles in the Oklahoma and others within the industry.

“There are probably several hundred, or a maybe a thousand, jobs that will go out of existence if the agency industry is closed down in Oklahoma,” Cunningham said. “There are hundreds of people employed doing licensing and registration in Oklahoma. So you are going to put all those people out of work.”

For truckers, according to Cunningham, the new rules mean “the state’s deciding through the IRP that a trucker has to base plate his vehicle in the state of his principle domicile – where you have your brick and mortar building and employees. Some truckers don’t have that.”

“I have clients that use independent contractors and agents to conduct their business. (The rule change) gives the advantage to the big guy who already has employees in every state, a guy who already has brick-and-mortar facilities in every state. And what that means is that guy gets to base his equipment in the best state, he can base his equipment in Oklahoma. But the small companies have got to go to where they are based and if you are unfortunate enough to have your trailer house in a state that’s got high taxes you get stuck.”

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