By: PrePass Safety Alliance Staff
The License Plate Battles
Before the federal government stepped in, where you based your truck could make or break your business. States fought fiercely to capture highway tax revenue, sparking a forgotten “war between the states” and trucks were on the front lines.
Every time states adjusted fuel taxes or registration fees, interstate motor carriers had to reconsider where their trucks were based. The license plate on a truck determined its tax treatment, and “out-of-state trucker” became a disparaging term. Local carriers claimed outsiders weren’t paying their fair share, while states with fewer trucks on their own roads sought ways to collect revenue from the fleets driving through. Retaliation was common: some states piled on extra fees for trucks registered elsewhere.
The Birth of Proportional Registration
By the 1950s, states began seeking a truce. A group of them adopted “proportional registration,” a system where motor carriers paid their home state a percentage of the license fees for every jurisdiction where they operated. That formula was simple. If a fleet ran 30% of its miles in Ohio and 20% in Texas, then Ohio and Texas received those portions of the registration fees.
The system spread across North America. By 1984, it had evolved into the International Registration Plan (IRP), eventually written into federal law in 1996. For the first time, trucks could operate seamlessly across state and provincial borders under a single registration system.
Fuel Taxes Follow Suit
Fuel taxation took a similar path. Instead of facing a patchwork of rules, carriers now report to their base state under the International Fuel Tax Agreement or IFTA. Just like IRP, IFTA relies on fleet miles to determine how much tax revenue each jurisdiction receives. Today all states and Canadian provinces participate.
Why It Still Matters
So, does it matter anymore where a truck is based? Absolutely.
While IRP and IFTA ended the interstate ‘tax wars,” business laws and labor regulations still vary by state. For instance, some states treat owner-operators as employees under labor law. And while fuel taxation is harmonized, wide swings in pump prices can still influence where fleets buy their fuel.
Most importantly, law enforcement today looks not at a state name on a plate, but for the IRP “apportioned” tag or IFTA decal to know that carriers are paying their share of highway taxes across every jurisdiction where they operate.
The Road Ahead
The battles of the past may be over, but the legacy lives on. The systems created to end state-to-state tax flights are now the foundation of modern interstate trucking. And for carriers, understanding how those systems work—and how state law still differ—remains as critical as ever.
At PrePass Safety Alliance, we track these shifts so carriers can stay focused on what matters most: moving freight safely, efficiently, and compliantly.
###