It’s not often the trucking industry catches a break, but for the 2023 regulatory year, that will happen. The Federal Motor Carrier Safety Administration has dropped Unified Carrier Registration (UCR) Plan and Agreement fees for the 2023 year.
FMCSA collects UCR fees from motor carriers and other businesses for highway motor carrier registration and safety programs. The decrease is approximately 31% across all vehicle fleet sizes. The last time the fee decreased was for 2021 when it dropped 14.45%.
1. What is the UCR?
The UCR was created by the Unified Carrier Registration Act of 2005 to replace the former system for registering and collecting fees for vehicles operated in interstate commerce.
Nearly every carrier that operates in interstate commerce is subject to the UCR. This includes motor carriers of property (both for-hire and private, regardless of whether they are considered exempt carriers for purposes of federal regulation), for-hire passenger motor carriers, freight forwarders, brokers and leasing companies that lease vehicles to carriers or freight forwarders engaged in interstate commerce.
2. Who must file?
“If the carrier engages in interstate commerce, it must complete the UCR registration,” explained Corrina Peterson, transport editor at J. J. Keller & Associates. “Basically, a carrier engages in interstate commerce if it moves goods or passengers that cross state lines or across borders of the United States. This includes transportation of goods or passengers only within a state if that movement is the beginning or continuation of movement that will cross a state or national border.”
(For more on the differences between intrastate and interstate commerce, read: The subtle differences that matter for motor carriers.)
3. When do I have to file my UCR?
Carriers subject to filing the UCR for 2023 must do so by Jan. 1, 2023. Enrollment is now open (it opens on Oct. 1 of each year). Failure to register with the carrier’s base state and to pay the annual fee to that state will result in the carrier’s authority to operate legally being suspended.
Carriers will not be issued a paper credential when registering, although the information is available to roadside enforcement through the FMCSA electronic information system.
4. How do I calculate what I owe?
The amount each carrier must pay in UCR is calculated based on the size of the fleet.
To determine vehicle ownership or operated, carriers can look at the number of commercial motor vehicles reported on the latest MCS-150 form filed with FMCSA or calculate the number of vehicles owned or operated for the 12-month period ending June 30 of the year prior to the registration year.
Motor carriers may deduct vehicles operated only in intrastate operation for the transportation of property, waste or recyclable material as applicable to the intrastate versus interstate consideration, Peterson said. The compliance firm also noted that passenger vehicles may not be subtracted from the count and freight forwarders may not subtract either freight or passenger vehicles. A vehicle registered under the International Registration Plan (IRP) is presumed to be an interstate vehicle.
5. What are the fees?
Once the number of vehicles subject to UCR has been calculated, the fee schedule is fairly straightforward. Designed as a bracket system, the fee is a per-carrier fee, not a per-vehicle fee, and is based on the total number of vehicles the carrier operates that are subject to the fee. For the 2023 registration year, the fee schedule is as follows:
|Tier||No. of vehicles||2023 fees|
|Bracket 1||0-2 vehicles||$41 (previously $59)|
|Bracket 2||3-5 vehicles||$121 (previously $176)|
|Bracket 3||6-20 vehicles||$242 (previously $351)|
|Bracket 4||21-100 vehicles||$844 (previously $1,224)|
|Bracket 5||101-1,000 vehicles||$4,024 (previously $5,835)|
|Bracket 6||1,001 and above vehicles||$39,289 (previously $56,977)|
As noted previously, brokers, freight forwarders and leasing companies are also subject to the UCR fee even if they do not operate any vehicles themselves. In these cases, the fees are assessed at the smallest fee category, Peterson said.
6. To which state do I pay the UCR fee?
When it comes time to pay the UCR fee, the common question for interstate carriers is to which state to make the payment. The answer is pretty straightforward — the payment is made to the “base” state of the carrier.
The base state is where the principal place of business is located in a participating state (only 41 states participate in the UCR program). However, if the base state is not a participating state, the carrier is still obligated to pay the UCR. In these cases, the carrier would claim as its base state any participating state where it maintains an office or has an operating facility. If neither of those conditions apply, the carrier would choose the nearest participating state or any participating state within its FMCSA region.
7. Do I have to keep any records?
Yes. Carriers must maintain UCR records for two years from the due date or filing date, whichever is later, plus any time period included as a result of state decisions or inquiries, Peterson said.
FMCSA offers options for storing records, allowing UCR records to be kept on paper, microfilm, microfiche or through any other computerized or condensed record storage system as required by the base state.
Importantly, there are two potentially required UCR documents, UCR-1 and UCR-2. UCR-1 would be required if the carrier subtracts vehicles used exclusively for intrastate transportation and includes a list of the vehicles subtracted. UCR-2 is used when the vehicle count is obtained from counting the number of vehicles owned during the 12-month period ending June 30 of the previous year and that count places the fleet in a bracket lower than that indicated on the last MCS-150/MCSA-1 form. J. J. Keller said in this case, the carrier must maintain a list of vehicles covered by the UCR registration and provide that information on Form UCR-2 to the base state upon request.
8. What happens if I don’t pay?
With fees as low as $41 and as high as $39,289 for the 2023 registration year, it may be easy for a carrier to forget to register and make payment or even just decide not to make the payment. However small the fee may be, failure to register can have significant penalties for the carrier, Peterson said.
The UCR audit program uses state IRP records to identify carriers that may have claimed a lower UCR bracket than they should have. Auditors tend to increase focus on carriers that pay a UCR fee in a lower bracket than the number of vehicles claimed in the carrier’s MCS-150 filing, or fleets paying in the two largest brackets.
According to Peterson, any carrier that can’t justify its UCR fee is required to pay the difference and failure to do so can lead to suspension and penalties its base state may impose for unpaid liabilities and enforcement penalties for any state in which its vehicles are found to be operating.
Any carrier that has underpaid its fee is considered to have not registered, which appears on the public portion of FMCSA’s website and subjects the carrier to enforcement actions.
Additionally, falsely completing a UCR registration form is subject to penalties as well. In some cases, states may even deny vehicle registration until UCR registration is complete.
In all cases, individual states are free to impose their own penalties for noncompliance.
UCR compliance is another paperwork requirement that in and of itself is not complicated but can have significant consequences if done improperly or not completed at all. For busy fleet managers, this type of compliance concern is sometimes best handled by outsourcing to compliance specialists. J. J. Keller & Associates offers UCR registration and renewal as part of its compliance solutions, ensuring that as carriers work to complete their end-of-year financials, UCR compliance doesn’t fall through the cracks.