You Really Can’t Take it With You

Reg and Alvin met back in 1982, and since that time have been relying on each other’s advice. In fact, they even bought new trucks last year. The exact same trucks, 2001 Freightliners, and got a good price on them-$120,000.

The company they work for, NeverLate Express, runs anywhere from British Columbia to Ontario and the lower 48 states. The carrier is Alberta-based and has Alberta prorate plates.

There have been big changes at NeverLate, and Reg and Alvin think it’s time to make a move. Another company, SuperQuick Carriers, is offering similar work. Reg is ready to go now, but Alvin wants more time to think. He’s heard other owner-operators complain about the “hidden” costs of switching carriers. Time your move right, they say, and you can cut out all kinds of fees and holdbacks.

It’s true, especially with prorated licence fees.

NeverLate renewed their licensing two months ago, in October, and has charged back the license fees and sales tax to both Reg and Alvin. If Reg leaves today, he probably won’t get back the fees he paid. The U.S. license fees are gone and won’t be refunded through Alberta, since most states have laws that don’t allow them to refund license fees. For the ones who do refund, the paperwork and bureaucracy involved usually isn’t worth the time.

For its part, NeverLate can use the “credit” on the plates to transfer them to a new unit. But it probably won’t make the effort to reimburse Reg when he leaves.

The Canadian provinces have an agreement to refund the unused portion of the fees (in this case, nine months, because you can’t count the month you leave as unused) less any administration fees charged by each province.

However, there is a refund only if the unit is deleted. If the credit is used in a transfer to a replacement unit, there is no refund. Again, depending on company policy, even if there is a credit available, Reg may not get it. In this case, the credit remaining for nine months of unused licence fees is around $450.

What about sales tax? Reg should get the sales tax back, but for an Alberta-based carrier, it’s a convoluted process. In B.C., SuperQuick must apply for the refund. But in Saskatchewan, Manitoba, and Ontario, NeverLate has to act on behalf of the owner/operator-in this case, Reg.

So what does this mean for Reg? What he might expect to get back won’t necessarily be what he gets back. If either the current or new company has administration in place to handle the processes, he will have a better chance of getting refunds.

If neither company has the time or expertise to do all the paperwork needed to apply for the refunds, Reg is out of luck. He’ll likely get the Canadian portion of license fees back, but no U.S. fees and no Canadian Sales Tax refunds.

Let’s say Alvin, on the other hand, decides to wait until one month before renewal to leave NeverLate. Chances are, Alvin won’t recoup any of his fees because there is usually a minimum amount the provinces will refund. But he’ll come out ahead of Reg. The charts on this page compare the difference between leaving a company two months into the licence year versus 11 months into it. Reg paid $5603.05, while Alvin, who waited, paid $3605.73. The difference: $1997.32.

It cost Reg roughly $2000 more to move when he did. If Reg can justify the cost, then it was worth it. If not, he’s out $2000.