An esoteric agreement between the 48 contiguous US states, Washington DC, and all 10 Canadian provinces that governs how large trucks and other commercial vehicles that cross state lines share billions of dollars in license plate fees.
When you register your car, you usually pay a small license plate fee to the state DMV, which goes towards funding roads, bridges, and other public infrastructure projects.
Such vehicles, known as “allocated vehicles”, are registered and licensed under what is known as the International Registration Plan (IRP), an agreement between states in the 1970s.
The IRP allows commercial trucks traveling within the US and Canada to use a single state license plate and registration card, but requires operators to pay tolls to other states based on how many miles they drive them and their weight. Some companies track mileage manually, while others use GPS systems.
So U-Haul, based in Phoenix since 1967, registers all of its rental trucks in Arizona, and then the state distributes those license plate fees to other states where the rental trucks travel.
Say, for example, one U-Haul van travels 20,000 miles in a year. If half the miles were in Utah and the other half in Colorado, the fees would be split between the two states.
No free riders
While most travelers have never heard of the IRP, it was developed as the interstate travel system expanded.
The agreement eliminated the need for trucks to have separate license plates and taxi cards for each state they passed through. It was also designed to ensure that states receive a fair share of license plate fees from out-of-state vehicles that wear down their roads.
“There are pictures of old trucks with 10 or 12 license plates on the front,” said Tim Adams, CEO of International Registration Plan, Inc., which enforces the agreement.
In 2021, the IRP included about 3 million vehicles and 350,000 companies, according to Adams. They paid $3.5 billion in fees, which were used to fund road building projects and safety initiatives.
“It brings in a lot of money to the road fund every year,” he said. An IRP is “a flexible agreement that still has a purpose.”
In fact, the agreement worked so well that the International Fuel Tax Agreement (IFTA), a similar agreement between states sharing commercial vehicle fuel tax sales, was modeled after it.
So the next time you’re playing the license plate game on your road trip and you’re passing U-Haul vans with Arizona numbers, you can impress your family by explaining why.