An esoteric agreement between the 48 continental US states, Washington DC and the 10 Canadian provinces that determines how large trucks and other commercial vehicles traveling across state lines dole out billions of dollars in registration fees license plates.
When you register your passenger car, you typically pay a small registration fee to your state’s DMV that goes to fund roads, bridges, and other public infrastructure projects.
Such vehicles, known as “prorated vehicles,” are registered and authorized under what is known as the International Registration Plan (IRP), an agreement created between states in the 1970s.
The IRP allows commercial trucks traveling within the United States and Canada to use a state-issued license plate and registration card, but requires operators to pay fees to other states based on the number of miles driven in them and their weight. Some companies track miles manually, while others use GPS systems.
So U-Haul, which has been based in Phoenix since 1967, registers all of its rental trucks in Arizona and then the state distributes those registration fees to other states where the rental trucks travel.
Let’s say, for example, that a U-Haul truck drove 20,000 miles in one year. If half the miles were in Utah and half in Colorado, the rates would be split between those two states.
No free riders
Although most travelers have never heard of IRP, it developed as the interstate travel system expanded.
The agreement eliminated the hassle of trucks having to carry separate license plates and cab cards for each state they traveled through. It was also designed to ensure that states got their fair share of license plate fees from other states wearing out on their roads.
“There are photos of old trucks with 10 or 12 license plates on the front,” said Tim Adams, executive director of the International Registration Plan, Inc., an organization that monitors compliance with the agreement.
About 3 million vehicles and 350,000 businesses were part of the IRP in 2021, Adams said. They paid $3.5 billion in fees that were used to fund highway projects and safety initiatives.
“It generates a lot of money for road funds every year,” he said. The IRP is a “fluid agreement that still has a purpose.”
In fact, the agreement has worked so effectively that the International Fuel Tax Agreement (IFTA), a similar agreement between states that split fuel tax sales from commercial vehicles, was inspired by the.
So the next time you play the license plate game on a road trip and keep passing U-Haul vans with Arizona license plates, you can impress your family by explaining why.