Monday, April 06, 2020
By MARK SCHEDLER

Is That Trip Interstate or Intrastate"There are conditions where a chauffeured transportation provider could be operating in interstate commerce even if a trip does not leave the state." If you operate vehicles that are regulated by the U.S. Department of Transportation, you’ve likely encountered the question of whether it’s interstate or intrastate commerce—and more critically, the answer is key to staying compliant. The answer should be simple, but that is not always the case.

Defining Interstate and Intrastate

The determination starts with the Federal Motor Carrier Safety Administration’s (FMCSA’s) definition of interstate commerce from 49 CFR 390.5:Mbr .

“Interstate commerce means trade, traffic, or transportation in the United States:
  1. Between a place in a state and a place outside of such state (including a place outside of the United States);
  2. Between two places in a state through another state or a place outside of the United States; or
  3. Between two places in a state as part of trade, traffic, or transportation originating or terminating outside the state or the United States.”
So what about intrastate commerce? Also found in 49 CFR 390.5, its parameters are a bit murkier: “Intrastate commerce means any trade, traffic, or transportation in any state which is not described in the term ‘interstate commerce.’”

To help operators understand the topic, FMCSA offers a bit of clarity in interpreting questions #6 and #13 in 49 CFR 390.3. The essential point is:

When either the vehicle, its passengers, or cargo cross a state boundary, or there is intent to cross a state boundary, the carrier must follow Federal Motor Carrier Safety Regulations (FMCSRs) as opposed to the state regulations. Interstate commerce can apply even if you do not haul passengers across a state line.

Carriers not subject to the FMCSRs must still be compliant with their state’s (intrastate) rules, which may or may not be similar or identical to the federal regulations. Be aware that most states adopt some or all of the FMCSRs as their own. State and local governments can enforce their own vehicle safety rules if those rules do not prevent compliance with the federal safety regulations.

Digging Deeper

There are conditions where a chauffeured transportation provider could be operating in interstate commerce even if a trip does not leave the state.

  • Scenario: One week in advance of a vacation, a client booked a nine-passenger vehicle for the transfer from the destination airport to the cruise-ship port. The contracted ride was entirely within one state but a state different from where the client started the journey. Is the limousine trip in intrastate or interstate commerce?

  • Answer: The chauffeured transportation from the airport to the cruise-ship port is considered interstate commerce.

  • Reason: If a passenger plans a trip involving more than one mode of transportation that begins and ends in different states or a place outside the United States (interstate commerce), and has prearranged by a ride with a chauffeured car service, then all transportation is in interstate commerce.
However, if the client did not arrange the ride before arriving at the destination airport, then the transfer from the airport to the cruise-ship port is not a continuation of the trip and is not in interstate commerce unless the vehicle crosses state lines.

The prior scenario involved a transportation company with only one location operating in one state. There are at least two considerations for companies with locations in multiple states but have some facilities that only run in intrastate commerce:
  1. The company must have an interstate USDOT number even if none of their sites operate in interstate commerce, and
  2. It is permissible for an interstate carrier to have intrastate-only operations that follow the often less restrictive intrastate rules, but this could increase the complexity of keeping locations compliant.
Another point to keep in mind is that the Unified Carrier Registration Agreement (UCR) uses the same definition of interstate commerce from 49 CFR 390.5—if the vehicle, freight, or passengers cross states lines, it is an interstate vehicle subject to annual UCR registration. However, when it comes to state taxation matters, such as vehicle licensing/IRP and fuel tax reporting/IFTA, the only consideration is where the vehicle itself travels. You may be running vehicles that are intrastate as far as IRP and IFTA are concerned, but interstate for DOT safety and UCR compliance.

The correct classification of your operation(s) as interstate or intrastate is a foundation of staying compliant. For further information, visit fmcsa.dot.gov/regulations/title49/part/390.   [CD1019]

Mark Schedler is the Senior Transport Editor for J.J. Keller. He can be reached at mscheder@jjkeller.com.