Every License And Permit You Need For Your Trucking Company
The number of licenses, permits, and paperwork for starting a trucking company can be overwhelming. But thousands of owner-operators and carriers have figured it out. You can, too! And we’re here to help.
The number of licenses, permits, and paperwork for starting a trucking company can be overwhelming. But thousands of owner-operators and carriers have figured it out. You can, too! And we’re here to help.
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Below is a complete list of every license, permit, or paper you might need to operate your trucking business. Click on each to read a full description:
- Commercial Driver’s License (CDL) and endorsements
- USDOT Number
- Operating Authority (MC Number)
- Unified Carrier Registration (UCR)
- BOC-3 Filing
- Form MCS-150
- Proof of Insurance
- FMCSA Drug & Alcohol Clearinghouse
- IRP Credentials
- IFTA License and Decals
- Heavy Vehicle Use Tax (IRS Form 2290)
- Standard Carrier Alpha Code (SCAC)
- Canadian Carrier Code
- State-Specific Requirements
- Oversize/Overweight Permits
- PHMSA Registration
- FMCSA Hazardous Materials Safety Permit
- General Business Requirements
Commercial Driver’s License (CDL) And Endorsements
Sure, this is an easy one! Many owner-operators need a CDL to operate their truck, but not all. Vehicles or combinations weighing less than 26,000 lb and transporting less than 16 passengers do not require a CDL. This means some box trucks, hotshot rigs, and cargo vans can be operated with a regular driver’s license. You can learn more about when a CDL is required on the FMCSA’s website.
Getting a CDL includes training, getting a permit, passing written exams, and passing a pre-trip inspection and road test. It can cost $2-8k, depending on where you live and where you train, but there are ways to pay for training through government programs, scholarships, and grants.
Depending on the type of equipment you want to run and the cargo you want o haul, like tank vehicles and hazardous materials, you may need additional endorsements as well.
All companies operating commercial vehicles involved in interstate commerce need a USDOT number, and trucking is no exception. A USDOT (US Department of Transportation) number is a unique identifier for storing safety information in audits, compliance reviews, investigations, and inspections.
If you’re operating only within your state (also known as intrastate commerce), most states still require you to have a USDOT number to operate.
To get a definitive answer on whether or not you need a USDOT number, visit the FMCSA’s website and take their online questionnaire.
When registering for your USDOT number as a new applicant, you need to use the Unified Registration System, follow the prompts and you’ll get your DOT number right away. You can apply for your operating authority at the same time, which brings us to the next permit you need for your trucking business.
Operating Authority (MC Number)
Your operating authority determines the type of operation your company can run and the type of cargo you can haul in interstate commerce (meaning you haul loads that originate from or are destined for another state).
You do not need an operating authority if you are a…
- Private carrier (hauling your own cargo)
- Carrier that operates exclusively within a federally designated “commercial sone” exempt from interstate authority (like the Washington DC metropolitan area).
If you’re still not sure whether or not you need an MC number, read more on the FMCSA’s website.
To apply for your operating authority, you’ll use the same process as the USDOT number on the FMCSA’s Unified Registration System. Processing costs a one-time nonrefundable fee of $300, so make sure you do it right the first time! It will take a day or two for your new authority to be registered in the FMCSA’s system.
Unified Carrier Registration
The Unified Carrier Registration is a federal program that replaced the previous state-by-state system for registration fees. These fees are a source of revenue for supporting USDOT safety programs and officer training.
All carriers involved in interstate travel have to pay this annual fee before December 31 of each year. To register, visit ucr.gov, enter your DOT number, and pay the fee based on the number of vehicles. As of 2022, the fee for 0-2 vehicles was $59.00. Then download your UCR Registration, print it off, and keep it in every vehicle.
Some states may also require you to have UCR Registration, so make sure you do your own research on the requirements for your state.
Next, if you’re doing any interstate travel, you’ll need to designate a process agent to do your BOC-3 filing. To do this, go to the FMCSA’s list of process agents and select one. Contact them or visit their website to get started. We recommend including all states in your BOC-3 filing so that you’re not limited to running in just one region.
You will need your 7-digit MC number to process the BOC-3. You can either wait for the mailed confirmation from the FMCSA or check the status of your authority on the FMCSA Licensing and Insurance Public using your USDOT number. Your MC number will show under “Docket Number”.
The cost depends on the company you use to file the BOC-3, normally between $100 and $300.
This form defines the type of business operation you plan to establish (motor carrier, broker, shipper, freight forwarder, etc.). To submit this form whether online or by mail, you will need your USDOT PIN number.
To request your USDOT pin:
- Visit this page on the FMCSA’s website.
- Select the option to get your PIN by email immediately.
- Enter your company’s information including your EIN.
- When prompted, verify the request by getting a code to your email or phone and entering it into the system.
Keep this PIN number safe and do not share it with anyone.
Use this PIN number to complete the MCS-150 form:
- Go to the MCS-150 page on the FMCSA’s website.
- Select “filing the required MCS-150 forms online” under filing options.
- Select the first option under “Existing Registration Updates” labeled “I need to update my USDOT member registration information or file my biennial updates (MCS-150) and Continue.
- Click File Electronically
- Enter your company’s information and click “Continue”
- Confirm that it’s your company and update any pertinent information.
Proof Of Insurance
Trucking insurance is one of the biggest costs to carriers, so make sure you take the time to research your options and the coverage you need. Even if you obtain your USDOT and MC numbers, you’ll need to have proof of insurance to activate your authority.
When shopping around for coverage, be sure to look at the full cost of each option. The plan that looks cheap could be more expensive down the line. Again, insurance is a big cost for carriers, but there are ways to reduce the cost:
- Employ experienced drivers with clean records (and keep your record clean!)
- Use newer equipment
- Avoid high-population metro areas or areas with notoriously bad weather
- Build your company’s credit through a fuel card or other means
- Pay upfront on a quarterly or annual basis
- Choose a plan with a high deductible
FMCSA Drug & Alcohol Clearinghouse
The Clearinghouse is a database with all recorded drug tests under the FMCSA’s drug and alcohol testing program, as well as return-to-duty processes. It’s designed to keep drivers from being able to hop from one carrier to another after positive drug and alcohol tests or other violations. All carriers are required to be on the Clearinghouse.
To register with the Clearinghouse, you first need to log into your FMCSA portal and request a Clearinghouse User Role. The FMCSA portal is what you used to apply for your USDOT and MC numbers. Here are the FMCSA’s official instructions on how to do this.
The other task you must complete before registering on the clearinghouse is designating a third-party administrator or consortium for your drug and alcohol testing program. This third party has to be registered with the Clearinghouse for them to appear in your registration and report information and conduct queries on your behalf.
Once you’ve requested a Clearinghouse User Role and designated a consortium or third-party administrator, these are the steps for registering on the Clearinghouse:
- Visit https://clearinghouse.fmcsa.dot.gov/ and click “Register”
- Create an account with an email, password, and 2-step authentication. When creating your account, you can select the language in which you’d like to access the information.
- After following the prompts and creating your account, you’ll be directed back to the Clearinghouse home page.
- Click “Log In” and you’ll see the registration dashboard appear.
- Select “Employer” as your role.
- If you are only an employer and not operating any of your trucks, then select “Register as an Employer”. If you are the employer and a driver in your company, select “Register as an Employer and a Driver”.
- If you already have your USDOT and MC numbers, you have an FMCSA Portal Account. Select “Yes” and then “Next”.
- Sign into your FMCSA Portal using the same credentials you used to apply for your USDOT and MC numbers. If you forgot your user ID or password, you can use the options linked below each to recuperate the information.
- Fill out your contact and company information. If you’re an owner-operator, meaning you are employing yourself as a driver, you will need to select “Yes, I am an owner-operator”. If not, select no.
- If you’re an owner-operator, you will be prompted to enter information about your license.
- Designate your Consortium/Third-Party Administrator by selecting them.
- Accept the terms and conditions of the Clearinghouse.
You can use your dashboard in your Clearinghouse account to keep track of test results and request driver history for new employees.
The International Registration Plan is a registration agreement between the states in the continental United States, the District of Columbia, and Canadian provinces that allows for the registration of commercial vehicles traveling in more than one state or province.
When you register for IRP credentials in one state, your cab cards list all of the jurisdictions where your vehicles can operate and the fees are apportioned based on how many miles you operate in each state.
IRP credentials are emitted by state departments of motor vehicles or transportation, so make sure you check with your state government office to get all details on how to register.
IFTA License And Decals
The International Fuel Tax Agreement is a shared policy of US states and Canadian provinces that streamlines paying taxes on motor fuel across those different states and provinces. If you operate vehicles weighing more than 26,000 pounds or that have three or more axles and you cross state lines to haul cargo, you are required to have an IFTA license.
As part of this program, your vehicles must be registered with IFTA decals in the business’s home state. Here’s a list of the state department of transportation websites. Alternatively, simple search “IFTA license [your state]” on Google or another search engine, and you should be able to easily find the process for registration and getting your decals. Once you have your IFTA license, you will receive two IFTA decals to place on each vehicle which must be renewed every year.
At the end of each fiscal quarter (in April, July, October, and January), you will create a fuel tax report of where you fueled and the miles you ran in each state to determine whether you owe or are owed tax money. In these reports, you will also include a vehicle mileage record, distance records, fuel records, and tax-paid retail fuel purchase receipts.
Heavy Vehicle Tax Use
Also known as IRS form 2290, the Heavy Vehicle Use Tax is paid by carriers operating vehicles with a gross weight of 55,000 lb or more on federal highways. The amount you pay each year depends on the weight of your trucks and ranges between $75 to $550 as of 2022.
This tax is due by August 31 of each year and proof of payment is required to register your truck and renew registration at the DMV. For new trucks, you need to file form 2290 by the end of the month after you first used the truck.
The form can be filed online or by mail and you’ll need this information to fill it out:
- Business name and address
- Employer Identification Number
- Vehicle Identification Number
- Taxable gross weight of your truck(s)
- First used month of your truck
For a step-by-step guide to filling out form 2290, watch this video created by DIY SEMI.
Standard Carrier Alpha Code
SCAC is a 2-4 digit code issued by the National Motor Freight Traffic Association Inc (NMFTA) and mandatory for motor carriers crossing international borders into the US. The code is used by US government agencies to track and inspect imported shipments to prevent contamination, bioterrorism, and public health emergencies.
To apply for a SCAC, visit the SCAC Renewal and Application website, follow the prompts, and pay the $87 filing fee. Make sure the information you provide matches exactly the information the USDOT has for your company, including the legal name and USDOT and MC numbers.
Canadian Carrier Code
A Canadian Carrier Code is emitted by the Canada Border Services Agency to carriers involved in international commercial transportation to transport goods to and from Canada. The application to get a code can be found on the CBSA website along with contact information and instructions on how to submit the application.
To fill out the form, you’ll need this information:
- Legal business name and DBA name
- Contact information
- Equipment and vehicle information
- Bonded or non-bonded carrier
- Proof of company ownership (see the CBSA website for details on what is required)
Canadian Carrier Codes can be approved and emitted in as little as three business days. Importing and exporting goods to and from the US or Canada comes with additional fees, taxes, and duties.
Some states have specific requirements in addition to IFTA and IRP for carriers based outside their jurisdiction. If you plan to run to or through any of the states mentioned below and meet their weight restrictions, you’ll need to obtain these additional permits:
Oregon PUC Trip Permit
If you operate vehicles with a gross weight of 26,000 lb or more or vehicles that have three or more axels, you’re required to have an Oregon trip permit, or heavy motor vehicle trip permit (yes, even if you already have an IFTA license). You can then choose to pay the fuel tax on a monthly or quarterly basis.
To obtain this permit, you’ll need to present your company and vehicle(s) information and proof of proper insurance coverage. For full instructions and information, visit the Oregon Driver and Motor Vehicle Services website.
Kentucky Permit KYU Filing
The KYU number is required in Kentucky for vehicles weighing more than 59,999 lb and tax filings are required on a quarterly basis. If you have a KYU number, you will need to file the quarterly taxes, even if you did not run in Kentucky during that quarter.
To obtain a KYU number, you’ll first need to set up a Kentucky Online Gateway account and then submit an online KYU application. Visit the Kentucky Weight Distance (KYU) webpage for complete information and links for getting started.
New Mexico WDT filing
The Weight Distance Tax permit issued by the state of New Mexico is required for commercial vehicles exceeding 26,000 lb. The tax rate associated with registration depends on the mileage traveled on New Mexico public highways and the weight of the vehicle(s). This registration requires a quarterly tax filing as well as an annual renewal.
For complete instructions on how to file for the WDT permit, visit the New Mexico Taxation and Revenue Department website.
New York (HUT)
If you plan to run in New York, you’ll need to obtain a Heavy Use Tax registration and pay the tax based on the mileage using New York public highways.
There are two options for registration, depending on how often you travel in the state. If you only run in New York occasionally, you can get a per-trip permit. If you travel often, you’ll need to do a complete registration and obtain decals for your trucks.
For more information on how to file for HUT, go to the New York State’s Department of Taxation and Finance website for full instructions.
State Motor Carrier Permit/Registration
A state motor carrier permit or registration is normally required for intrastate carriers and some interstate carriers and is similar to getting an operating authority from the FMCSA. These permits are managed by each state’s Department of Motor Vehicles or similar government agency.
For example, a TxDMV number is required for “motor carriers operating intrastate commercial motor vehicles on a road or highway in Texas”, according to the Texas DMV. California requires “drivers who transport property, operate large commercial vehicles, transport hazardous materials, or operate vehicles requiring a CDL” to have a motor carrier permit issued by the State of California DMV.
These permits vary largely from state to state, so make sure you check with your state’s DMV that you have everything you need to start your operation.
State Oversize/Overweight Permits
Here are the federally mandated maximum weight limits in trucking, according to the USDOT Federal Highway Administration:
- 80,000 lb gross vehicle weight
- 20,000 lb single axel weight
- 34,000 lb tandem axle weight
Permits for carrying oversize or overweight vehicles are issued by states. For example, the Arizona Department of Transportation issues permits for vehicle and load combinations depending on certain size and weight limits.
These permits can cost anywhere from a couple of dollars to a couple thousand dollars, depending on the size and type of cargo. But traveling without a permit can be even more costly and can even put you out of business!
The USDOT Pipeline and Hazardous Materials Safety Administration requires that carriers moving certain quantities and types of hazardous materials file an annual registration and pay a fee.
Here are the types of cargo that require PHMSA registration:
- A highway route controlled quantity of radioactive material
- More than 25 kilograms explosive material
- More than one liter per package of a “material extremely toxic by inhalation”
- A hazardous material (including hazardous wastes) in a bulk packaging having a capacity equal to or greater than 13,248 liters for liquids or gases or more than 13.24 cubic meters (468 cubic feet) for solids.
- A shipment in other than a bulk packaging of 2,268 kilograms (5,000 pounds) gross weight or more of one class of hazardous materials
- A quantity of hazardous material that requires placarding.
The fee for a small businesses is $250, plus a $25 processing fee. You can register online on the PHMSA website or by mail. For full details on who is required to register and the types of materials, visit the PHMSA Registration Information page.
FMCSA Hazardous Materials Safety Permit
The FMCSA’s Hazardous Materials Safety Permit Program (HMSP) was created in 2005 and requires carriers of hazardous materials to meet higher safety standards in their operation. Here are the materials that require an HMSP:
- Radioactive Materials
- Toxic by inhalation materials in Hazard Zones A, B, C, or D
To get an HMSP approved, you will need…
- A satisfactory safety rating
- A crash rate below the worst-performing 30 percent of the national average
- Driver, vehicle, and hazardous material out-of-service rates below the worst-performing 30 percent of the National average;
- A satisfactory security program (and associated training)
- A current Certificate of Registration with PHMSA;
- A system of communication that enables the vehicle operator to contact the motor carrier during the course of transportation including maintenance of these communications records; and
- A written route plan that meets certain requirements for radioactive materials or explosive materials.
- Proof of insurance, stating the level of coverage required for the permitted materials being transported.
General Business Requirements
Business Registration And License
To establish your business legally, you’ll need to choose a legal structure. We recommend an LLC or similar structure that protects your personal assets in the event of a lawsuit. You can learn more about the different legal structures for small businesses here.
Then you’ll need to register your business with the local authorities. This process differs depending on the state and city where you live and work. You’ll need to provide a name for the business: something unique and easy to remember that suites the vision you have for your new company.
DBA or Fictitious Business Name Registration
DBA stands for “doing business as”. It’s a permit that allows you to conduct business with another name that’s not your business’s legal name. For example, if you’re operating as a sole proprietor, your legal name is Karl Smith. If you want to go by KS Trucking, you need to register that name with a DBA.
If you’ve followed our advice about registering your business as an LLC or corporation, you may not need a DBA because your business’s name is already registered. However, this rule varies by state, so make sure you ask about a DBA when registering your business regardless of the legal structure.
To file a DBA, look up your city or state’s requirements. You may need to complete the process by mail, online, or in a county clerk’s office or a Secratary of State branch. The process can cost up to $100.
If you operate under any name other than the business’s legally registered name, you can be fined by the state or city regulatory office. It can also pose a liability risk, so make sure you register the name you use on invoices, contracts, social media, business communications, and any printed material.
Employer Identification Number (EIN)
An EIN, also referred to as a Federal Tax Identification Number is issued by the Internal Revenue Service to identify a business. Corporations, LLCs, and partnerships need an EIN, as does anyone wanting to open a business bank account.
Applying for an EIN is pretty straightforward. You’ll go to the IRS website and select “Apply for an EIN Online”. Follow the prompts with all your business information and you’ll get your EIN instantly.
State Tax ID Number
Of course, this requirement depends entirely on your state. Every state has different tax obligations. You’ll need to do some research on income and employment taxes in your state and the process for applying for a state tax ID if necessary.
Workers’ Comp Insurance
Worker’s compensation insurance is mandatory if you have one or more employees. It covers employees’ wage and medical benefits in the case of illness or injury. If you’re established as a partnership or LLC and don’t plan to hire any employees just yet, you likely don’t need workers’ comp insurance, but much like other items in this list, you want to keep it in mind for future growth.
Requirements for workers’ comp insurance depend on the state where your business is registered. Be sure to check state regulations on this topic.
Zoning And Land Use Permit
Zoning refers to laws and regulations about how property can be used, usually set by municipal or local governments. For example, zoning laws can prevent certain types of businesses from building near schools or residential areas in an effort to reduce noise or protect resources.
These local regulations can affect the type of business you can operate from your home and whether or not you can use your property to store certain equipment. It’s always a good idea to seek local zoning information before starting your business so that if your neighbors complain and local law enforcement comes knocking, you have proof that your business meets local zoning guidelines.
Similarly to zoning laws, building permits are required for businesses that want to remodel or build any commercial space. If you’re just starting out as an owner-operator, you may not need to think about this. But keep it in mind in the future as your business grows.