Page 11 - ATR 6 2013 digital

NEWs iN BriEf

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authority revocations will only increase, authority has been revoked as high as Bradburn of Indianapolis accounting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

arkaNsas TruckiNg reporT | issue 6 2013 11