How to Start a Transportation Business in Texas: Licensing Steps

Starting a transportation business in Texas means stacking a legal entity, tax IDs, federal motor carrier credentials, state motor carrier registration, insurance filings, and driver qualifications in a specific order, because each step depends on the ones before it. Plan on several weeks from formation to your first legal mile. The path below walks through each requirement in the order you should tackle it.

Form Your Business Entity

Your first filing is with the Texas Secretary of State. Most transportation owners create either an LLC or a corporation, both of which shield personal assets from commercial debts and lawsuits tied to fleet operations.¹

Before you file, search the SOSDirect database to confirm your chosen name is distinguishable from every other registered entity in the state. Texas law requires that your name not be confusingly similar to an existing filing entity, a registered foreign entity, or a name already reserved.² The name also has to include a designator like “LLC” or “Inc.”³

Every Texas entity must appoint a registered agent with a physical street address in the state. A P.O. box won’t work, and neither will a virtual mailbox. The agent’s office must be a location where someone can physically hand-deliver legal papers during business hours.⁴ You can serve as your own agent, but the entity cannot serve as its own agent.

The formation document itself is the Certificate of Formation. LLCs file Form 205; corporations file Form 201.⁵ The filing fee is $300, and you can file online through SOSDirect or by mail.³

Get Your Tax Identification Numbers

Once the entity exists, apply for a federal Employer Identification Number from the IRS. The EIN is free, and you’ll use it for tax filings, opening a business bank account, and hiring. Apply online at IRS.gov or submit Form SS-4, listing the entity’s legal name, the responsible party’s Social Security number, and the primary business activity.⁶ Online applications return the EIN immediately.

Then register with the Texas Comptroller of Public Accounts. Texas imposes a franchise tax on most entities, and even if your revenue falls below the no-tax-due threshold, you still have to file an annual Public Information Report or Ownership Information Report.⁷ Missing these filings can eventually cause the Secretary of State to forfeit your entity’s right to do business.

Federal Motor Carrier Credentials

USDOT Number

Any company operating commercial vehicles in interstate commerce, and any intrastate carrier hauling hazardous materials in quantities that require a safety permit, must register with the Federal Motor Carrier Safety Administration and obtain a USDOT number.⁸ The number is how the federal government tracks your safety record, including crash data, inspections, and compliance reviews. You apply through the FMCSA’s Unified Registration System.⁹

Operating Authority (MC Number)

A USDOT number alone doesn’t cover for-hire work across state lines. Carriers hauling federally regulated commodities or passengers in interstate commerce also need operating authority, commonly called an MC number.¹⁰ The MC number defines what type of cargo you can carry and what kind of operation you’re authorized to run. Private carriers hauling only their own goods, and for-hire carriers hauling exclusively exempt commodities, don’t need operating authority.

BOC-3 Process Agent Designation

Interstate carriers must file a BOC-3 designating a process agent in every state where they operate, so legal papers can be served on someone authorized to accept them. Only a process agent, not the carrier, can file the BOC-3 with the FMCSA.¹¹ Several third-party services handle this for a small fee.

Register With the Texas DMV

Whether you operate interstate or purely inside Texas, you cannot legally run a commercial motor vehicle on a Texas highway without a certificate of registration from the Texas Department of Motor Vehicles.¹² Household goods carriers fall under the same rule even if their vehicles don’t hit the usual weight thresholds. You need a valid USDOT number before TxDMV will issue the certificate.

The application is filed electronically through TxDMV’s motor carrier system. Expect to provide your entity name, physical address, Comptroller taxpayer number or federal EIN, and the names of principal officers or partners, along with a list of every vehicle in your fleet.¹³

Fees depend on registration length:

Annual or biennial registration: $100 application fee
90-day registration: $25 application fee
Seven-day registration: $5 application fee

Fees are paid at submission.¹³ Once approved, TxDMV issues a single registration number tied to your company regardless of fleet size. Keep a copy of the certificate in every cab.

Secure Your Insurance Filings

Nothing gets activated at TxDMV without proof of insurance. Federal law sets the minimum liability limits, and Texas follows the same schedule for intrastate carriers:

General freight (non-hazardous, for-hire, vehicles over 10,000 lbs): $750,000
Certain hazardous materials transported in bulk: $5,000,000
Other hazardous materials and hazardous waste: $1,000,000

These amounts come from the federal financial responsibility schedule and apply to combined bodily injury and property damage liability.¹⁴

Your insurance company files Form E (liability) directly with TxDMV. Carriers cannot submit these forms themselves. Household goods carriers also need cargo insurance filed on Form H. TxDMV won’t approve registration until both are on file, so line up quotes and coordinate with your insurer well before you’re ready to submit the application.

Unified Carrier Registration

UCR is a separate federal requirement for any carrier, broker, or freight forwarder operating commercial motor vehicles in interstate or international commerce.¹⁵ If you hold an MC number but all your vehicles weigh under 10,001 pounds, you still register — just in the lowest fee bracket.

UCR fees for 2026, by fleet size:

0–2 vehicles: $46
3–5 vehicles: $138
6–20 vehicles: $276
21–100 vehicles: $963
101–1,000 vehicles: $4,592
1,001+ vehicles: $44,836

These are annual fees paid per entity.¹⁶ Renewal is required every year.

Qualify Your Drivers

The vehicles you run determine the CDL class your drivers need. Federal rules draw the line at 26,001 pounds:

Class A: any combination with a gross combination weight of 26,001 pounds or more when the towed unit exceeds 10,000 pounds.
Class B: any single vehicle of 26,001 pounds or more, or such a vehicle towing a unit that does not exceed 10,000 pounds.

These thresholds are federal and apply nationwide.¹⁷ In Texas, a new CDL costs $97 and is valid for eight years.¹⁸ Drivers must complete entry-level driver training through an approved provider before taking the skills test.

Before anyone drives a commercial vehicle for you, query the FMCSA Drug and Alcohol Clearinghouse. Pre-employment queries are mandatory, and you also have to run annual queries on every current driver. Queries require the driver’s written consent, and if a limited query returns a record, you have 24 hours to run a full query or pull the driver from safety-sensitive duties.¹⁹ Hiring without the query puts you in violation before your first load.

Interstate Fuel, Registration, and Heavy Vehicle Taxes

IFTA

If your vehicles cross state lines, you’ll almost certainly need International Fuel Tax Agreement credentials. IFTA applies to any qualified motor vehicle, meaning a vehicle with two axles that exceeds 26,000 pounds, three or more axles regardless of weight, or a combination exceeding 26,000 pounds.²⁰ You file one quarterly fuel tax return with Texas, and the state distributes the taxes owed to each jurisdiction where your trucks burned fuel. Without IFTA credentials, you’d buy fuel permits at every state border.

IRP

The International Registration Plan works the same way for registration fees. Vehicles operating in two or more IRP jurisdictions that exceed 26,000 pounds, or have three or more axles, register under the IRP and receive apportioned plates. Fees are prorated by miles driven in each state. Texas handles IRP through the TxFLEET portal.²¹

Heavy Highway Vehicle Use Tax

Vehicles with a taxable gross weight of 55,000 pounds or more owe the federal heavy highway vehicle use tax, reported on IRS Form 2290.²² The annual tax runs from $100 at the 55,000-pound threshold to $550 for vehicles over 75,000 pounds, with a reduced rate for logging vehicles. The tax period runs July through June, and you must file by the last day of the month following first use on public highways. The IRS-stamped Schedule 1 receipt is required before you can register or renew heavy vehicle plates.

Ongoing Compliance After Launch

MCS-150 Biennial Update

The FMCSA requires every motor carrier to update its registration every 24 months using the MCS-150. Your deadline depends on the last two digits of your USDOT number: the last digit sets the month (1 = January through 0 = October), and the next-to-last digit determines whether you file in odd or even years.²³ Address, phone, fleet size, and other key changes must be reported within 30 days. Letting the biennial update lapse can deactivate your USDOT number.

New Entrant Safety Audit

New carriers enter an 18-month monitoring period after they begin operating. Once you’ve generated enough records, usually after at least three months, the FMCSA conducts a safety audit covering driver qualifications, hours of service, vehicle maintenance, accident register, and drug and alcohol testing.²⁴ If the audit finds inadequate safety management, you have 60 days to fix the problems, or 45 days for passenger or hazmat carriers. Fail to correct, and the FMCSA revokes your registration and places you out of service. Get record-keeping right on day one, not day 90.

Franchise Tax Reports

Each year, your entity must file with the Texas Comptroller even when zero franchise tax is due. The required filing is Form 05-102 (Public Information Report) or Form 05-167 (Ownership Information Report), depending on entity type.⁷ Entities above the threshold also file an EZ Computation Report or a Long Form Report. Missing this filing is a common way small carriers quietly lose their standing with the Secretary of State.

1
Texas Secretary of State. Selecting a Business Structure
2
Texas Secretary of State. Name Filings FAQs
3
Texas Secretary of State. Form 205 – Certificate of Formation – Limited Liability Company
4
Cornell Law School. 1 Texas Admin Code 79.28 – Registered Agent and Office
5
Texas Secretary of State. Business and Nonprofit Forms
6
IRS. Instructions for Form SS-4
7
Texas Comptroller. Requirements for Reporting and Paying Franchise Tax
8
Federal Motor Carrier Safety Administration. Do I Need a USDOT Number?
9
Federal Motor Carrier Safety Administration. Getting Started with Registration
10
Federal Motor Carrier Safety Administration. What Is Operating Authority (MC Number) and Who Needs It?
11
Federal Motor Carrier Safety Administration. Form BOC-3 – Designation of Agents for Service of Process
12
Cornell Law School. 43 Texas Admin Code 218.11 – Motor Carrier Registration
13
Cornell Law School. 43 Texas Admin Code 218.13 – Application for Motor Carrier Registration
14
eCFR. 49 CFR 387.9 – Financial Responsibility, Minimum Levels
15
Unified Carrier Registration. Do I Need to Register?
16
Unified Carrier Registration. Fee Brackets
17
Federal Motor Carrier Safety Administration. Drivers
18
Texas Department of Public Safety. Driver License Fees
19
Federal Motor Carrier Safety Administration. Drug and Alcohol Clearinghouse Registration and Requirements for Employers
20
IFTA, Inc. Carrier Information
21
Texas Department of Motor Vehicles. Motor Carriers
22
Internal Revenue Service. About Form 2290, Heavy Highway Vehicle Use Tax Return
23
Federal Motor Carrier Safety Administration. When Am I Required to File a Biennial Update
24
eCFR. 49 CFR Part 385 Subpart D – New Entrant Safety Assurance Program