NEWS IN BRIEF
BROKEN-UP BROKERAGES The number of freight brokers
disappearing from the federal rolls has been increasing by the hundreds every day since December 1, following the new requirement to carry a $75,000 bond, up from $10,000 by the MAP-21 highway funding act passed last year. According to DC Velocity, some
2,000 brokers have been affected after the Federal Motor Carrier Safety Administration (FMCSA) began the broker license revocation process just after the start of December. It is unclear how many brokers voluntarily surren- dered their licenses versus how many had their authority revoked. “It is expected the number of
authority revocations will only increase, as some industry professionals estimate that about 50 percent of the 21,000 plus freight brokers within the U.S. are still not $75,000 compliant,” read a statement on JW Surety Bonds’ website, one of the nation’s largest surety bond sellers. That number, however, could also
include brokers who had their licenses revoked for reasons other than not complying with the bond increase, said Norita Taylor, spokesperson for the Owner-Operator Independent Drivers Association (OOIDA). Taylor said the increase helps pro-
tect owner-operators from fraudulent brokers. “While most brokers provide a valuable service, the previous system left too much room for fraud where funds were collected from shippers but not paid to owner-operators.” A group of brokers opposed to the hike, The Association of Independent
ARKANSAS TRUCKING REPORT | Issue 6 2013
Property Brokers & Agents, lost a last minute court challenge to delay enforcement. The Arkansas Trucking Association along with the American Trucking Associations, the Transportation Intermediaries Association and OOIDA favor the high- er bonding amount. James Lamb, president of the
Association of Independent Property Brokers & Agents says it’s “highly unlikely a significant amount” of the non-compliant brokers will be reinstat- ed because of the 60-day grace period and the time that brokers had to comply with the bond increase. Lamb says the next phase could
push the number of brokers whose authority has been revoked as high as 75 percent. That phase, he said, would come after the “shaky” bonds some brokers purchased to remain compliant come up for renewal in a year. He also said the industry would
now be controlled by larger brokers, who will ask for higher rates, but will not pass those rates onto owner-opera- tors. In fact, he said, they could restrict rates for owner-operators.
IRS RULE FAVORABLE ON TRUCK FLEETS New tax rules that started January
1 will change the way trucking compa- nies and other U.S. businesses account for real estate and business equipment and could create room for more same- year deductions rather than multiyear depreciation, according to several tax experts. “If you can deduct it immediately, you’ll recover the expenditure faster.
Otherwise, it could take several years to recoup it,” said CPA Christopher Bradburn of Indianapolis accounting firm Katz, Sapper & Miller, which repre- sents about 95 U.S. trucking companies. Known as Tax Decision 9636, the
rule could be particularly important for less-than-truckload carriers, which have large real estate holdings for their net- works of terminals. Highway tractors usually are
depreciated on a three-year schedule. Tax analysts believe the rule is almost “too good to be true.” A Katz, Sapper & Miller (KSM) analysis for its clients said the companies that can be most aggres- sive in expensing purchases are pub- licly traded firms that have to file an annual 10-K report with the Securities and Exchange Commission or a pri- vately held firm that pays for a certified, audited annual financial statement and has a written policy in place on deduc- tions and depreciation.
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