Why U-Haul Trucks All Have Arizona License Plates
By Nathaniel Meyersohn, CNN Business
(CNN) — There are about 175,000 white and orange U-Haul rental trucks in the United States and Canada for do-it-yourself movers. And they all have something weird in common: Arizona license plates with the word “distributed” stamped on them.
An esoteric agreement between the 48 continental US states, Washington DC and the 10 Canadian provinces determining how large trucks and other commercial vehicles crossing state lines distribute billions of dollars in registration fees.
The issue of U-Haul license plates took on greater prominence last week after New York investigators said they were seeking information about a U-Haul van with U-Haul license plates. Arizona in connection with a subway shooting that injured more than 20 people.
License plate fees
When you register your passenger car, you typically pay a small license plate tax to your state DMV which is used to fund roads, bridges and other public infrastructure projects.
But commercial trucking, rental, and leasing companies that use large rigs to transport goods across multiple states operate on a completely different system. These vehicles need special permission to cross state lines and must pay higher license fees, often in excess of $1,000 per year.
These vehicles – called “proportional vehicles” – are registered and registered under what is known as the International Registration Plan (IRP), an agreement created between states in the 1970s.
The IRP allows commercial trucks traveling in 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 kilometers they cover and their weight. Some companies keep track of 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 the state then distributes that license plate fee to the other states where the rental trucks travel.
Let’s say, for example, that a U-Haul van traveled 20,000 miles in one year. If half of the miles were in Utah and the other half in Colorado, the charges would be split between those two states.
U-Haul, owned by holding company Amerco, does not disclose the annual registration fee or which states receive the most money. But a U-Haul spokesperson said he paid “a large sum of money” in IRP fees.
No free riders
Although most travelers have never heard of IRP, it was developed as the interstate travel system expanded.
The deal eliminated the hassle of trucks having to carry separate license plates and taxi cards for each state they passed through. It was also designed to ensure that states got a fair share of license plate fees from out-of-state vehicles that wore out on 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., 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 which were used to fund road projects and safety initiatives.
“It generates a lot of money for road funds every year,” he said. The IRP is a “smooth deal that still has a purpose”.
In fact, the agreement worked so effectively that the International Fuel Tax Agreement (IFTA), a similar arrangement between states dividing commercial vehicle fuel tax sales, was modeled after it.
So the next time you play the license plate game on a road trip and pass U-Haul vans with Arizona plates, you can impress your family by explaining why.
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