Need a little advice CDL/non CDL

Discussion in 'Trucking Industry Regulations' started by Dino soar, Jan 17, 2024.

  1. Dino soar

    Dino soar Road Train Member

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    @brian991219 and anyone else that can help

    I used my tractor commercially for several years and now I really just want to use it to move my brother's things to his farm. He has his personal things to move plus he has quite a bit of Excavating equipment. The farm is about 3 hours away.

    His hobby is actually to buy Excavating equipment and he needs more at the farm so that's really what the truck will be used for. He's actually going to excavate a road and build a garage and do a lot of construction and excavating there. He may even buy a dump trailer so I can haul Stone in for him and whatever else he needs.

    Now I'm really not interested in commercially driving anymore myself. I'll move his things and haul for him for the farm but I don't want to work commercially anymore. I do have my F350 on my authority to keep it active and I could go run hot shot Freight if I like.

    So I could not figure out how to tag the tractor or register it to do this, so I got a tag but the registration is still in the LLC business name.

    It was very difficult trying to figure out what to do because they would only give me an apportion plate and at that point I wasn't really thinking about much except trying to get his things moved. We had a trailer he bought and I had to go get it, so I tagged it in name of the LLC.

    Now thinking on that, that makes me nervous. A truck tagged in the name of the business that's being used personally with non-cdl requirements I think the wrong dot guy may give me a real hard time.

    On the other hand, I don't know that there is a regulation that says if your truck is registered in a business name that you can't use it personally.

    I am also curious because it's my brother's things I'm moving not mine, but I truly am doing this to help my brother I'm not doing this to get paid or run a business. That truck is not listed on my MCs 150. Only my f350.

    At the moment the insurance on the truck is Haggerty Classic Car insurance, so obviously I'm not using it for business but again I can see the wrong cop give me a hard time.

    And when it really becomes time to start moving the equipment up there, I'm going to get a regular policy, but it's going to have way low limits that are nowhere near what you need to haul commercial or for anyone else.

    If I transfer the truck into my personal name, I will have to pay another $2,500 registration, I will have to pay sales tax, and I still have no guarantee that they will not give me a hard time because even though it's my immediate sibling, they actually are not my own things I'm moving.

    Is that really a problem?

    Now I could start an LLC with my brother for the farm and put myself on for a very small tiny percentage just to get the truck registered as a farm truck, but I think at that point the Farm owns the truck, not me. So if my brother has 99%, he owns 99% of my truck as far as I understand. I'm going to check with the CPA as soon as I can to make sure that's correct.

    I trust my brother but I'm old enough and I've been around enough to know that you don't do those kinds of things. You keep things separate you keep them simple.

    I've considered joining a Consortium so they can see that I'm not hiding from the drug test, but if I'm doing something that's non-cdl it's not required. And if I do that they may just turn around and say that's more evidence that I'm running a business I don't have the right Insurance how dare you let's throw the book at you.

    Since the truck is already tagged, I have considered running it on a limited basis commercially, but the insurance is probably about $10,000 a year now so I really would have to work more than I want to just to pay off the insurance.

    I have back and leg issues that I can drive part time, that would be okay, but if I drove every day I wouldn't be able to walk, and I'd be in severe pain.

    It's incredible how much relief I have not driving.

    So at this point I'm not quite exactly sure what to do except I'm going to talk with my accountant and see if there's any other way to set this up with the farm that somehow I still retain complete ownership of the truck.

    Isn't there any way I could just lease the truck to the farm?

    I suppose the farm could own it and I put a lien on it but.. anybody that has any advice I'd appreciate it.
     
    Last edited: Jan 18, 2024
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  3. rollin coal

    rollin coal Road Train Member

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    A little off topic but I injured my back a couple of years ago. Turned out to be a bulging disc pushing into the nerve. The pain got so bad I literally couldn't tie my shoes. It was a major drag on me mentally trying to keep on trucking which is all I know or ever wanted to do. I managed to get back to normal after I found out what it was from an MRI and seriously committed to losing weight and doing a lot of physical therapy. Luckily I didn't need surgery. Kind of sounds similar to what you have going on. Sciatica and nerve pain is no joke. Lots of drivers have screwed up backs.
     
    Dino soar Thanks this.
  4. Dino soar

    Dino soar Road Train Member

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    Thank you so much I appreciate that.

    When I parked my truck, in one year exactly I went from 220 lb to 170 lb. The difference in how I feel is night and day.

    When I went up to pick up our low bed, it was about 3 hours away. When I got out of the truck I couldn't walk. The pain isn't really as much in my back. What seems to happen is my hip flexors immediately become so tight and simultaneously my hamstrings tighten up and my quadriceps and all of a sudden I get out of the truck and my muscles have shortened up to the point I can't walk, I can't stand barely, all I can do is hobble around and walk it off.

    I remember times when I was driving I'd have to pull over and I'd get out of the truck and my hamstrings and my quadriceps would both be cramped simultaneously. Now I realize it was my hip flexors also. No matter how you move to try to stretch that out it just got tighter. Again all I could do is hobble around until I could walk it off. That was really painful.

    I remember going to truck stops and trying to stretch it out and trying to really release it before I go to bed at night and there's no way possible driving I could ever do that that I could see.

    I could feel my body getting Tighter and Tighter and I could feel such a lack of range of motion like my body was strangling itself and the stiffness and pain was unbelievable.

    There was just no way I could continue like that. It was making me like a cripple.

    Now I work out every single day. I'm still having problems with my hip flexors and the psoas muscles in my back are not as strong as they should be but I am strengthening them and I feel so much better. I go through my whole day with no pain.

    Now, my legs, my hip flexors, my back, it all keeps becoming more and more flexible.

    I'm going to go next month and we'll see maybe they'll give me therapy or maybe there is something else going on, but we'll see.

    I've been so incredibly fortunate that at this point in time I have other opportunities in life other than trucking. I'm fortunate that it wasn't my lifelong dream or anything like that. I knew that it's time would come and go.

    I'm really happy for you that you were able to overcome your problem.
     
    rollin coal Thanks this.
  5. brian991219

    brian991219 Road Train Member

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    Dino Soar, I wish there was an easy answer for your question. Unfortunately, our politicians love to make everything so complex!

    While it may sound like personal use to you, and most people would agree, the fact that the stuff you want to haul belongs to someone else is a problem. Since your brother is operating the farm, presumably as part of his income, anything you haul for him would be business related. You could own the truck and lease it to the farm so that you can display farm plates and be covered under his farm insurance, however that would make it complicated when you want to use the truck for you own stuff.

    Further, you have asked before about hauling machinery for excavation and such, which if done as part of the farm (on his land or leased farm land) would be agricultural but if done for any other purpose with any form of compensation it would be commercial and require you to register and operate the truck as a commercial vehicle.

    Let's talk about compensation while we are at it. For legal purposes, compensation does not need to be direct money you invoice for or wages earned. If your brother simply pays for your fuel and maybe buys some parts to fix your truck that is compensation, making this a commercial enterprise.

    As for your registration, there is no way being based in Pennsylvania for you to register the truck privately without paying sales tax since it is currently titled in the name of your LLC. To transfer it to your private name would be a transfer of ownership and taxable. Even if it were titled in your private name from the beginning, if you claimed the motor carrier sales tax exemption that Pennsylvania allows when you first bought the truck you would have to pay the sales tax to renew or purchase a new registration plate once you were no longer a for-hire motor carrier.

    What is even worse is the way that PA calculates sales tax value. They will tax you on the retail value of the vehicle when doing a transfer like you want to since there was no bill of sale. An argument could be made that the truck has little to no retail value if you have already depreciated it off your income taxes down to a zero value, however our tax laws still have a minimum value that PennDOT can set at the average retail price based on a market comp study, which is a fancy way of saying "blue book" value.

    The simplest way for you to help your brother is to sell him the truck, let him register it in the farm's name and insure it. He can then pay you a fair wage to drive it, or make you a part owner of the farm and pay you with a dividend from the profit from operating the farm. For you to retain ownership of the truck and haul his stuff, even his hobby stuff, will require you to remain in business and meet all the commercial hurdles. Now, if you never leave the state you can get a regular truck plate instead of the IRP plate, but in PA you will still need fuel decals (state instead of IFTA) and may need to apply for PA PUC authority since you would not be interstate, instead doing purely intrastate work. Some of the stuff the farm needs would be exempt but not all of it, especially not things like the machinery and equipment.

    If the farm owned the truck, and everything your brother does is in the name of the farm and for the farm, no excavation for any outside people, then it could be argued that everything falls under agriculture in PA, which would allow farm plates and no authority. This is still subject to individual motor carrier enforcement officers discretion, so be prepared to prove you are a pure farm operation.

    If you really want to keep ownership of the truck, the best way to protect you is to remain an active motor carrier and still jump through all the hurdles. If not, and something goes really bad, you could end up losing everything you have worked for. Lawyers love to prove the trucker was acting in bad faith, cheating the system, which then makes the jury angry and they add lots of zeros to the end of their settlements, even when the injured person was at fault. Please keep this in mind when making your decisions, that while noble to want to help your brother, you can't risk everything you have to help him -or anybody else for that matter.
     
    wis bang and prostartom Thank this.
  6. wis bang

    wis bang Road Train Member

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    brian991219 is correct.

    You might convince a DOT trooper it is AG use if it is actual farm equipment but registered to your LLC instead of the farm won't fly too far.

    Now load up a big bright yellow excavator, even if registered to the farm, using AG gets difficult but won't work if registered in the LLC name.

    Sell it to him so he can register it at a lesser weight to not need to pay Highway Use tax and avoid IRP and just deal with PA fuel tax which sounds like it would be minimal unless he's buying a lot of equipment or gets a dump trailer and racks up the miles.
     
    Dino soar Thanks this.
  7. Dino soar

    Dino soar Road Train Member

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    @brian991219

    Thank you that was really the answer that I was looking for.

    At this point, I'm not concerned about using the truck for myself whatsoever. If I can just lease it to the farm and put a farm tag on it and be exempt from the regulations and insurance other than the farm plate and Farm Insurance, I'm fine with that.

    He needs the truck up there for some time. I think he's going to buy a dump trailer and he needs Stone hauled in and he's going to have quite a site development going on up there at his own Farm. A lot of Excavating has to be done for the road and the building and all the other stuff he's doing there.

    How do I go about leasing the truck onto the farm? Does the farm have to have an LLC? Can I leave the truck in the name of the business or does it have to change?
     
  8. brian991219

    brian991219 Road Train Member

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    The process of leasing to the farm is the same as leasing to any other entity. Decide who will be responsible for what, put it in writing and sign the papers. Yes, your LLC can lease the equipment to the farm, although you will then have to maintain the LLC as active and the payment for leasing will be made to the LLC.

    It may be hard to get PennDOT to comprehend that the truck is being leased to the farm so he can get farm plates while still titled in your LLC name, although it is not unheard of with larger farms. Keep pushing on them until they agree that the farm will be the registrant of the vehicle.

    It may be easier to sell it to the farm than lease it to the farm, although that triggers some taxes and then it is no longer your truck. Personally I would sell it to the farm before I leased or rented it to the farm, not because of anything other than it makes a cleaner transaction and clearly makes your brother responsible for whatever happens to it. I don't know you or your brother, but when things go sour even family can react in crazy ways. It makes for a better deal when it is crystal clear who is responsible for what. Unless you are emotionally attached to the truck for sentimental reasons, or have other plans for it after this farm deal is complete, it is just a truck and probably makes sense to leave it on the farm for the daily work. If your brother buys it then there won't be any hurt feelings if something happens to it the one time he uses it when you are not there, which is very likely to happen if you retain ownership of it but leave it there for site work.

    Whatever you do, keep your class A so that you are covered using your F-350 with bigger trailers. Remember, even for non-commercial vehicles in Pennsylvania we have the class A and B licenses unlike many other states, meaning you will need at least a non-commercial class A to pull large trailers with your pickup truck.
     
  9. Dino soar

    Dino soar Road Train Member

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    That's excellent advice.

    I completely get that when things happen people get sour and that's exactly why I'm trying to work all of this out.

    My brother and I both have had equipment our whole lives and he understands every mile of that truck moves cost money and that things happen and he wants to reimburse me or figure a way that's fair to do this and I do also.

    For me leasing the truck to the farm is the absolutely best thing of all. I was told I wasn't able to do that.

    Him paying me a fee per mile or hour or whatever would work for me. The truck will be mine we can put it on full coverage if an act of God happens and aside from that it'll just be me running my truck like I always have it'll just be for him and the farm and part-time. We'll figure whatever fee would work for that.

    If we write up a lease agreement, does the farm have to have an llc, or can I write that up with him personally?

    Is this, now I know we are in pennsylvania, but is it this as simple as my business can write up an agreement with him personally, and then my business is leased on to his farm, but because I'm exclusively leased on to his farm I don't have the CDL requirements and I'm limited to only strictly moving equipment for the farm?

    That's okay with me, if that's how we do that.
     
  10. brian991219

    brian991219 Road Train Member

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    Whatever name is the legal owner of the farm is who would need to lease the truck. If the farm is owned in just your brother's name and he operates it as a sole proprietor in that name then he would be leasing the equipment from your LLC. I am not sure of the exact language that needs to be in the lease, because the farm is not a motor carrier so the FMCSA Part 376 rules don't apply, however I am sure that PennDOT will need to see the farm take exclusive control of the truck before they allow your brother to register it. I am thinking it will be structured more like a long term lease form Penske would be, where you have the option to put your own license plate on their truck, but I am not 100% sure.

    I shy away from giving advise on state specific questions, although I have given plenty on my home state of Pennsylvania, just have not done a farm vehicle registration ever. Find a good commercial tag and title agent in farm country, they will probably be best equipped to answer the finer points of your questions.
     
  11. Dino soar

    Dino soar Road Train Member

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    That's also excellent advice to find a good Farm notary.. going to do that right now.

    Thank you Brian I appreciate it. This has been such a mess trying to figure it all out.

    Leasing on to him will solve multiple problems for both of us.

    If I have any more questions I will call on you again.
     
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