“Toto, I’ve a feeling we’re not in Kansas anymore.”
This line from The Wizard of Oz has come to signify that we are no longer in a place we recognize or feel comfortable.
When my lawyer of the last 30 years asked for my driver’s licence to prove I was who I said I was, I knew the world as I have known it had changed. Remember when you could use a credit card without having to prove it was yours, or, heaven forbid, write a cheque to pay for your purchase? The Internet and computers were supposed to make transactions easier and more convenient. Instead, I can’t go online to check my bank balance without first having to punch in a code sent to my cellphone.
This new status quo of “don’t trust, verify twice” has led to an exponential increase in the scrutiny of documents required by the government or registry agents (Alberta). One registry agent told me it feels like he needs a law degree to process simple transactions – the new reality.
These front-end requirements are slowly eroding the promises of efficiency and unity that came with reciprocity agreements like the International Registration Plan (IRP) and International Fuel Tax Agreement (IFTA).
IRP, IFTA, and other prorate programs are designed to streamline the administration, apportionment, and payment of taxes and fees when you travel outside your home jurisdiction. Establishing where your fleet is located is the most fundamental aspect of these agreements. But it’s becoming more challenging all the time.
For example, say you’re a B.C. resident or business with trucks running throughout Western Canada and you need to insure your fleet. Insurance is cheaper in Alberta so you decide to base a new fleet of vehicles there.
Not so fast.
IRP has strict guidelines about base jurisdictions. If you’re a single owner-operator, you have to prove that you’re an Alberta resident or have an established place of business there. For proof, the Alberta Prorate office will accept any three of the following documents:
• For individuals, an Alberta driver’s licence;
• For corporations, an Alberta Certificate of Incorporation;
• A federal income tax Notice of Assessment (NOA) that shows your income tax returns were filed from an address in Alberta;
• An NOA proving that personal income taxes have been paid to Alberta;
• Proof of utilities paid in Alberta in the company’s name.
In order to produce these documents, you’ll have to physically move to Alberta or incorporate a business there.
If you’re a corporation, you have to show an “established place of business” in Alberta. Again, there are specific rules to follow.
You need to have an actual physical structure within Alberta that is occupied by the IRP applicant (i.e., your company). This location must have regular hours and be open during that time with at least one company employee. A copy of the lease, mortgage, or a current property tax notice for the physical address used in Alberta can serve as proof of an established business.
While the criteria are supposed to be strictly adhered to, don’t expect every jurisdiction to handle things in the same way. Interpretation is, well, interpretation by the person reviewing your documents. I’ve seen interpretations vary within jurisdictions. You practically have to be a wizard to figure it all out.
Whether you are in Kansas, Alberta, or wherever else the tornado sets you down, establishing a place of business is not as obvious or simple as it should be. Read the rules and be prepared to back up who you are with proper documentation. Even the yellow brick road has a few unexpected turns.