Here is my situation, I live in California and for those that know the rates can be outrageously high. I want my own authority but I don't want to have to give a kidney to do so. I am trying to structure it so that I will be profiting not be in the red for the next 5 years. I was deciding on whether I should do it here or another state such as Mississippi? I'm going to need everything (Base plates, IFTA, IRP, LLC,) everything! are there any risks involved? Does anyone out there have 1st hand info on how to do it?...... Thanks!
What are the "Pros & Cons" of trying to obtain an authority in a state that I do not reside in?
Essentially record keeping. You need a place where you keep your records, ie trip sheets and logs. It would seem if that place is somewhere you are not, it may be difficult. That's the only downside I see.
There are a lot of problems with it.
If you form an LLC in another state you have to pay to be a foreign entity. And you still have to pay your taxes to your own State you can't escape that.
You have to have a physical presence and a physical address for your Authority. I think some of the new carrier audits are done online, but I do think the DOT still comes to your place of business. So you need an accurate place of business for them to come to.
Also if you tell the insurance company that you live in another state and you get cheaper Insurance in another state, and you have an accident you can be in a lot of trouble.
If you have an accident and someone is suing the insurance company it's much cheaper for them to just hire an investigator and see if they really need to pay. And they will investigate and investigators find out all kinds of things.
If you lie on your insurance application, they do not have to pay out any claims. You never want to be in a situation that God forbid something happened which could be an astronomical cost, and the insurance company tells you it is all your responsibility because you have no insurance coverage because you lied on the application.
On top of that, I believe it's illegal. It's called insurance fraud.
There probably are some people that do things like that or attempt to do things like that but the way that liabilities are and the cost involved with insurance claims, that is taking on a crazy amount of risk just to save some money on an insurance premium.
Better to move or just pay whatever the premium is.loudtom Thanks this.
It is easy to do, but as others said if you get into an accident it can be a problem.
If moving to another state is an option just do that.
Several years ago I had to get a DL in Nevada. It was a piece of cake. I rented a mail box at a location similar to UPS store (actual address) went to DMV and just exchanged my CA CDL for NV CDL no test to take nothing. Had to drop my Haz Mat because didn’t have time for the background check.
You can rent a small office for couple hundred a month or a room and call it your place of business. Use it for CDL address too. This should work.
Keep in mind if you decide to get your CA CDL back they will make you take all the tests starting from class C. At least the commies didn’t make me take a driving tests.
If it wasn’t for my wife’s job I would have moved out of here long ago.