Do you operate interstate or intrastate? The answer may surprise you.
Posted July 15, 2016
It seems like a fairly straightforward issue. Interstate transportation involves a vehicle crossing borders and operating in two or more jurisdictions; if a truck never leaves a state, it must be performing intrastate motor carriage.
Surprisingly, this is not always true. The FMCSA provides the definition of interstate transportation in §390.5:
Interstate commerce means trade, traffic, or transportation in the United States—
- Between a place in a State and a place outside of such State (including a place outside of the United States);
- Between two places in a State through another State or a place outside of the United States; or
- Between two places in a State as part of trade, traffic, or transportation originating or terminating outside the State or the United States.
The first two parts of this definition are pretty clear ― a vehicle crossing a border means interstate commerce.
It is the third part of the definition that complicates things ― interstate commerce is trade, traffic, or transportation involving the crossing of a state boundary. What this means is when either the vehicle, or its passengers or cargo cross a state boundary, or there is intent to cross a state boundary, the carrier is considered an interstate carrier.
The FMCSA does offer some clarification with this guidance for §390.3 General Applicability:
- Question 6: How does one distinguish between intra- and interstate commerce for the purposes of applicability of the FMCSRs?
- Guidance: Interstate commerce is determined by the essential character of the movement, manifested by the shipper's fixed and persistent intent at the time of shipment, and is ascertained from all of the facts and circumstances surrounding the transportation. When the intent of the transportation being performed is interstate in nature, even when the route is within the boundaries of a single State, the driver and CMV are subject to the FMCSRs.
For example, a distributor of auto parts located in Chicago, IL, purchases a truckload of auto accessories from a manufacturer in Los Angeles, CA. The truckload is shipped via rail, using an intermodal carrier at origin, with the destination of Chicago, IL. Your trucking company, an Illinois based carrier, is hired to receive the truckload from the rail yard in Chicago and deliver it to the auto parts distribution center in the Chicago area. When you supply this service, your trucking company is participating in an interstate shipment even though your truck never left the state of Illinois. The shipment was intended to cross many state boundaries and therefore is considered an interstate shipment.
Now, three weeks later, the auto parts distribution center in Chicago, IL, hires your company to deliver auto parts (some of which contain items purchased from the Los Angeles manufacturer) to their retail outlets located within the state of Illinois. These shipments are now intrastate shipments, since the intent of the transportation service at the time of shipment is within the boundary of the state of Illinois.
In both examples, even though the truck never left the boundary of the state, one transaction was interstate commerce while the other transaction was intrastate commerce.
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