State Laws Newsletter

April 13, 2016

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IRS Proposes Permanent Excise Tax Regs – The Federal Register of March 31, 2016, carried a Notice of Proposed Rulemaking from the federal Internal Revenue Service proposing permanent rules for the 12 percent excise tax on the sale of trucks, trailers, and parts and for the federal tax on heavy tires. The proposal also reworks the definition of “highway vehicle” for purposes of those two taxes and for the federal excises on fuel and for the heavy vehicle use tax. Since soon after the current set of highway user taxes was imposed by Congress in the early 1980s, IRS has administered these taxes under temporary regulations, most of which have now been in effect for more than 30 years. The proposal reorganizes and restates much of the existing regs, and incorporates a few legislative changes and court cases that have been enacted or decided in the interim, but there don’t appear to be any surprises here. If you see something new and unpleasant, please let us know! There is a 90-day period for public comments on the IRS proposal.


IFTA Members Approve Amendments – Voting by the states and provinces on this year’s proposals to amend the International Fuel Tax Agreement ended March 24. We understand that all seven of the proposed amendments were adopted by IFTA, a process that requires an affirmative vote by at least 75 percent of all 58 IFTA members. Only one of the proposals this year was critical – the one setting a standard for liquefied natural gas – but several of the others are of some interest. (The remaining proposals are administrative only.) The most important ballot proposal – No. 5 – sets 6.06 pounds or 0.73 kilograms (for IFTA filers based in Canada) as the standard unit (a diesel gallon equivalent) for purposes of IFTA reporting of LNG. The same standard that has been adopted by IRS and by more than half the states, with the remainder using a variety of units. Without a uniform unit of measure for a fuel, IFTA reporting of that fuel simply won’t work, and LNG cannot be measured directly in volumetric units. This change to IFTA is effective only July 1, 2017, but it is expected that the delay will affect few IFTA filers. The other ballots of interest are: No. 3, which requires the states and provinces to upload demographic data on their IFTA accounts to the IFTA Clearinghouse daily, to improve the timeliness of information; No. 6, which makes a failure of a state or province “to audit on behalf of all other IFTA jurisdictions” an infraction that may be taken to the IFTA Dispute Resolution Committee (although no one really knows what that requirement may mean in practice); and No. 7, which requires jurisdictions to include on the audit reports they give to carriers and to the other states and provinces the date through which interest has been calculated on any underpayments.


AZ Court Finds Tort Lawsuit to Be a Tax Appeal – The Arizona Court of Appeals has upheld the decision of a lower court to the effect that a taxpayer’s tort claims against a county and its officials amounted to a tax appeal. The plaintiff here, representing himself, claimed that the county and its assessing officials had acted with gross negligence and had negligently and intentionally inflicted emotional harm on him. The county argued, and the court agreed, that the plaintiff had failed to allege facts to support any of these tort claims. However, rather than dismiss the case, the court instead, acting under the state rules of civil procedure, converted it into a tax appeal, in order “to achieve substantial justice.” And it granted the plaintiff a measure of tax relief for the one year remaining open under the statute of limitations. It also, pursuant to state law on successful tax appeals, awarded him a portion of his court costs. Lockerby v. Pima Cty., et al., docket no. 1 CA-CV 15-0277, decided March 24, 2016

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fleet insights

Man holding a digital tablet managing fleet operations and freight logistics, standing near a lineup
January 30, 2026
Fleet management strategies for 2026: use telematics, real-time compliance tools, smart software, route planning, and training to cut costs.
By Matthew Bowles January 27, 2026
On January 8, 2026, the U.S. Department of Transportation (DOT) announced that the minimum random drug and alcohol testing rates for CDL drivers will remain unchanged. For calendar year 2026, the required testing rates are: 50% for random drug testing 10% for random alcohol testing This marks the sixth consecutive year that these rates have remained in effect following the Federal Motor Carrier Safety Administration’s (FMCSA) increase from 25% to 50% in January 2020. Based on current industry data, these testing levels are unlikely to decrease in the near future. Why the Testing Rate Remains at 50% FMCSA operates under a performance-based testing model established by its 2001 final rule, Controlled Substances and Alcohol Use and Testing. Under this rule: When the industry-wide positive random drug test rate reaches or exceeds 1.0% , FMCSA is required to maintain a 50% random testing rate . To reduce the rate back to 25% , the industry must demonstrate positive test rates below 1.0% for two consecutive calendar years . At present, the data does not support a reduction. The last decrease occurred in 2016 when positive test rates were low enough to justify a reduction to 25%. However, by 2018 the positive rate had climbed back to 1.0%, triggering the return to 50% testing beginning in 2020. What the Drug & Alcohol Clearinghouse Data Shows The FMCSA Drug & Alcohol Clearinghouse provides clear insight into why the testing rate has not changed. Since January 2020: Over 300,000 drug and alcohol violations have been reported 324,996 drivers have at least one violation on record More than 200,000 drivers are currently in prohibited status Over 150,000 prohibited drivers have not started the return-to-duty (RTD) process That last figure is particularly significant. More than 150,000 CDL holders remain sidelined and legally prohibited from operating a commercial motor vehicle, with no steps taken to regain eligibility. Substances Most Frequently Identified The Clearinghouse also tracks violations by substance. Since 2020, cumulative positive results show: Marijuana (Δ9-THCA): 171,270 Cocaine: 47,237 Methamphetamine: 24,589 Amphetamine: 22,932 Opioids (combined): 21,763 Other substances: 5,793 Marijuana alone accounts for approximately 60% of all positive drug tests . While marijuana may be legal at the state level in many areas, federal law strictly prohibits its use by CDL drivers . State legalization does not override DOT regulations. What This Means for Motor Carriers The Minimum Is a Floor, Not a Ceiling The 50% testing rate is the minimum requirement, not a maximum. FMCSA allows and encourages carriers to test at higher rates if their company policies support it, provided all DOT testing procedures are followed. Many fleets choose to operate testing pools at 75% or even 100% . A strong testing program can: Act as a powerful deterrent Identify issues before they lead to incidents or crashes Demonstrate a commitment to safety for insurers and shippers Reduce liability exposure Any testing conducted above the DOT minimum must still follow proper DOT protocols, and non-DOT testing programs must be kept completely separate from DOT testing pools. Understanding the Numbers For example, a carrier with 100 drivers in its random pool must conduct at least: 50 random drug tests 10 random alcohol tests Additional requirements include: Tests must be reasonably spread throughout the year Driver selections must be truly random using a scientifically valid method Every driver must have an equal chance of selection Owner-operators must be enrolled in a consortium Clearinghouse Compliance Is Mandatory With Clearinghouse II fully implemented as of November 2024, enforcement has expanded significantly. State DMVs now have real-time access to Clearinghouse data, meaning violations can directly impact a driver’s CDL status. Motor carriers must ensure: A full pre-employment Clearinghouse query is completed before a driver operates a CMV Annual queries are conducted on all current drivers Drivers in prohibited status are immediately removed from safety-sensitive functions All Clearinghouse actions are properly documented What Drivers Need to Know For CDL drivers, the message is clear: Federal law applies regardless of state marijuana laws. A positive THC test will result in immediate prohibition until the return-to-duty process is completed. Violations follow you. Drivers can no longer avoid failed tests by changing employers. All carriers are required to query the Clearinghouse. Refusals are treated as positive tests. Missing a test, tampering with a sample, or failing to provide a sufficient specimen without valid medical justification all count as refusals. The return-to-duty process is costly and time-consuming. Drivers should expect SAP evaluations, treatment, RTD testing, and follow-up testing for at least 12 months—often costing $2,000 to $5,000 or more . Looking Ahead The 50% random drug testing rate will remain in place until the industry achieves two consecutive years with positive rates below 1.0%. Given current Clearinghouse trends—particularly marijuana-related violations—it is reasonable to expect this testing rate to continue through at least 2028, and likely beyond. Smart fleet operators will treat this as standard operating procedure and focus on what they can control: strong hiring practices, consistent Clearinghouse queries, compliant random selection processes, and a culture that prioritizes safety and accountability. For drivers, the takeaway is simple: know the rules, stay compliant, and don’t gamble your career on the belief that you won’t be selected .
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Understand DOT numbers, who needs them, and how to apply through FMCSA to stay compliant and avoid costly delays.