Plates and Fuel Tax for Leased Owner-Operators: IRP and IFTA

Two owner-operators sign on with the same carrier in the same week. One arrives with plates and an IFTA decal in their own name from three years of running independently. The other is new to owning a truck and has temporary tags. The carrier's onboarding packet treats them the same, and by the end of the first quarter nobody is sure who owes fuel tax for which miles.

Apportioned registration and fuel tax are the least discussed part of a lease, and they cause more confusion at quarter-end than almost anything else. The rules give carriers and owner-operators real choices. The trouble comes when nobody writes down which choice they made.

This guide covers the two systems, the options each one allows for a leased truck, and how to put the decision into the lease and the settlement.

Two systems, two different jobs

The International Registration Plan (IRP) handles registration fees. A truck that runs in more than one state gets one apportioned plate from its base jurisdiction, and the registration fees are split among the states and provinces based on the distance the truck travels in each. The paper that matters on the road is the cab card, which lists the jurisdictions the truck is registered for and the registrant.

The International Fuel Tax Agreement (IFTA) handles fuel tax. A licensee files one quarterly return with its base jurisdiction, reporting miles and gallons by state. Fuel bought in a state with a lower tax rate than where the miles were driven means tax is owed; the reverse earns a credit. The decals on each side of the cab show which IFTA account the truck runs under.

Both systems apply to the same kinds of vehicles, generally: a power unit with two axles and a gross or registered weight over 26,000 pounds, a unit with three or more axles regardless of weight, or a combination over 26,000 pounds. Practically every tractor an owner-operator leases to a carrier qualifies.

The two systems are separate accounts with separate audits. A truck can be registered under one party's IRP account and run under the other party's IFTA license, although keeping them aligned is simpler.

Option one: plates in the owner-operator's name

When a truck is under a long-term lease to a carrier, IRP allows the registration to sit with either party. Under the first approach, the owner-operator is the registrant. They:

• apply in their own base jurisdiction and pay the apportioned fees;
• receive the plate and cab card in their own name;
• keep the distance records the registration audit will ask for;
• carry the plate with them if the lease ends.

This suits experienced owner-operators who already have an IRP account, who expect to move between carriers, or who want to control their own renewal date. It also means the carrier does not front registration fees for a truck it does not own.

The catch is the record-keeping. The registrant has to be able to show, in an audit, the miles behind the fees. If the carrier's ELD or dispatch system holds those records, the lease should say the carrier will provide them, in what format, and how soon.

Option two: plates under the carrier's account

The second approach puts registration under the carrier's IRP fleet, with the cab card showing both the carrier and the owner-operator. In this setup, the carrier generally:

• adds the truck to its apportioned fleet and pays the fees;
• holds the plate and cab card as the registrant;
• keeps the operational records for its own registration audit;
• controls what happens to the plate when the lease ends, including transfer or a credit for unused fees where the base state allows it.

Carriers often recover the fees through settlement deductions, either all at once or spread across weeks. That is allowed under Truth-in-Leasing, but only if the lease spells it out. More on that below.

This suits new owner-operators who have never set up an IRP account, and carriers that want uniform plates across the fleet and a single renewal cycle.

The point that causes the most arguments: if the owner-operator paid for the plate through deductions and the lease ends early, what happens to the unused portion? Industry practice is often that the carrier passes back any credit it receives for unused fees, to the extent the owner-operator paid them. But "often" is not a contract term. Write the answer into the lease.

Trip leases are a different case

Not every lease is long-term. When an owner-operator's apportioned truck is trip leased to another carrier for a single load, the responsibility for registration stays with the owner of the truck. If the trip goes through a state that is not on the cab card, a trip permit is needed. The distance from the trip still gets reported on the owner's IRP account, even though another carrier ran the load.

For carriers that use trip leases to cover a short-term need, the practical step is to look at the cab card before dispatch, not after the truck is at the state line.

IFTA: who files for the leased truck

IFTA has its own rules for leases, and base jurisdictions apply them with some local variation. The broad pattern under the IFTA framework:

Because states vary in how they apply the designation, and some require specific language in the lease, confirm with your base jurisdiction before relying on a default. The current IFTA Articles of Agreement are published by IFTA, Inc., along with links to each member jurisdiction.

In practice, two setups dominate:

Carrier files. The truck runs under the carrier's IFTA license and carries the carrier's decals. The carrier's fuel card and ELD data feed one quarterly return. The carrier then settles the owner-operator's share of the tax or credit through the settlement.

Owner-operator files. The truck carries the owner-operator's decals, and the owner-operator files a quarterly return for the truck's miles. The carrier's job is to hand over accurate mileage by jurisdiction each quarter.

Neither is wrong. What is wrong is a truck with the owner-operator's decals while the carrier also includes it on its return, or a truck that appears on no return at all.

Quarterly timing

IFTA returns are quarterly, and each is generally due by the last day of the month after the quarter closes:

When a due date falls on a weekend or holiday, base jurisdictions typically move it to the next business day. Records supporting each return, meaning trip distance by jurisdiction and fuel receipts, are generally kept for four years.

If the carrier files, owner-operators should still ask for a copy of the jurisdiction breakdown for their truck each quarter. If the owner-operator files, the carrier should deliver that breakdown well before the due date. Two weeks after quarter-end is a reasonable target to put in the lease.

Putting it into the lease

Federal Truth-in-Leasing rules in 49 CFR 376.12 require the lease to clearly specify every item the carrier pays first and then deducts from the owner-operator's compensation, and how each amount is calculated. Registration fees and fuel tax are both classic charge-back items. A lease that covers them properly answers these questions:

1. Who is the IRP registrant? Owner-operator or carrier, and what name or names appear on the cab card.
2. Who pays the apportioned fees, and how? In full at onboarding, or through deductions of a stated amount per week or per settlement.
3. What happens to the plate and any fee credit if the lease ends? Return of the plate, transfer, and refund of unused fees the owner-operator paid.
4. Who holds the IFTA license for the truck? And whose decals go on the cab.
5. How is fuel tax settled? If the carrier files, how the truck's share of tax due or credit earned is calculated and when it appears on the settlement.
6. What records does the carrier provide? Jurisdiction mileage from the ELD or dispatch system, fuel purchases on the carrier's card, delivery format and deadline.
7. Who pays audit assessments? If a registration or fuel tax audit finds a shortfall tied to the truck's miles, which party bears it, and how disputes are handled.

The more specific the language, the fewer settlement disputes later.

How it shows up on the settlement

Owner-operators judge a carrier by the weekly settlement, so plate and fuel tax lines need to be readable. Examples of clear entries:

• IRP plate fee, unit 214, deduction 6 of 26: $XX.XX (amount from the lease schedule)
• Q3 IFTA, unit 214: net tax due $XX.XX or net credit $XX.XX, with the jurisdiction breakdown attached or available on request
• Trip permit, Oregon, load 55812: $XX.XX

The dollar figures here are placeholders. The point is the format: what the charge is, which truck, which period, and how it ties back to the lease.

A fuel tax credit belongs to whoever paid for the fuel. If the owner-operator bought the fuel, and the carrier's return earned a credit because that fuel was purchased in a higher-tax state, the lease should say how that credit reaches the owner-operator.

When the lease ends

The end of a lease is where plate and fuel tax problems come to light. A short checklist for both sides:

• Plate and cab card. Return or transfer as the lease says. A carrier-registered plate stays with the carrier; an owner-operator's own plate leaves with the truck.
• Decals. Remove the carrier's IFTA decals if the truck ran under the carrier's license, or confirm the owner-operator's decals stay valid.
• Final quarter. Agree on how the partial quarter's miles and fuel will be reported and settled. Escrow is often held until that is resolved, and the lease should say how long.
• Fee credits. Pass back any unused registration fee credit the owner-operator paid for, as the lease requires.
• Records. Give the departing owner-operator the mileage and fuel data for their truck so they can answer any later audit.

Common mistakes

• No written designation of who files IFTA on a long-term lease. When an audit comes, both parties point at each other.
• Charging plate fees without a schedule in the lease. Truth-in-Leasing requires the lease to specify the item and how it is computed.
• Decals that do not match the return. The truck carries one party's decals and appears on the other party's return.
• No mileage handoff. An owner-operator who files their own return with no jurisdiction data from the carrier is guessing.
• Forgetting the trip permit when a trip-leased truck enters a jurisdiction not listed on its cab card.

For the registration side, the International Registration Plan publishes the plan itself and contact points for each member jurisdiction's IRP office, which is the place to confirm base-state rules.

Frequently asked questions

Can a leased owner-operator keep plates in their own name?Yes. For a long-term lease, IRP lets the truck be registered either by the owner-operator or under the carrier's fleet. The owner-operator who registers it pays the fees, keeps the records and takes the plate when the lease ends.

If the carrier holds the plate, can it deduct the cost from settlements?Yes, if the lease clearly specifies the deduction and how it is calculated, as 49 CFR 376.12 requires for charge-back items.

Who files IFTA for a leased truck?For leases under 30 days, generally the license holder the truck operates under. For leases of 30 days or more, carrier and owner-operator can usually designate which one reports, ideally in the lease. Check your base jurisdiction's rules.

What happens to plate fees if I leave the carrier mid-year?It depends on the lease. If the carrier registered the truck and you paid fees through deductions, the lease should say whether you get back a share of any credit the carrier receives for the unused portion.

How long should IFTA records be kept?Generally four years from the return's due date or filing date, whichever is later. Records tied to an open audit may need to be kept longer.

Does a trip lease change who is responsible for registration?No. The owner of the truck remains responsible for having it properly registered for every jurisdiction on the trip, or for buying trip permits where it is not.