in-20260128-IR-045260009NRA: DEPARTMENT OF REVENUE

DEPARTMENT OF REVENUE LETTER OF FINDINGS: 42-20242079 International Fuel Tax Agreement For the Tax Year 2022 HOLDING Indiana trucking business was not able to meet its burden of proving the proposed assessment was wrong. Therefore, the assessment remains as issued. ISSUE

I. International Fuel Tax Agreement – Assessment.

Authority: IC 6-6-4.1-4; IC 6-6-4.1-14; IC 6-6-4.1-20; IC 6-6-4.1-24; IC 6-8.1-3-14; IC 6-8.1-5-1; IC 6-8.1-5-4; IFTA Agreement, Article XII, § R1210 (2022); IFTA Procedures Manual, §§ P530 and P540 (2022); Indiana Dept. of State Revenue v. Rent-A-Center East, Inc., 963 N.E.2d 463 (Ind. 2012); Lafayette Square Amoco, Inc. v. Indiana Dept. of State Revenue, 867 N.E.2d 289 (Ind. Tax Ct. 2007); Dept. of State Revenue v. Caterpillar, Inc., 15 N.E.3d 579 (Ind. 2014). Taxpayer protests the assessment of additional fuel taxes imposed pursuant to the International Fuel Tax Association, Inc.’s (“IFTA”) Articles of Agreement (“Agreement”) and the Indiana Code (“IC”). STATEMENT OF FACTS Taxpayer is an Indiana-based motor carrier business that provides trucking services. The Indiana Department of Revenue (“Department”) audited Taxpayer related to the Agreement. The Department determined that, due to insufficient supporting documentation, Taxpayer had underreported the amount owed under the Agreement. In accordance with the Agreement, the Department issued a proposed assessment plus penalties and interest. Taxpayer protested the proposed assessment. Taxpayer waived its right to a hearing. This Letter of Findings is therefore based on materials sent in by Taxpayer in its protest submission and the Department’s records. Additional facts will be provided as necessary.

I. International Fuel Tax Agreement – Assessment.

DISCUSSION Taxpayer protests the imposition of additional IFTA taxes for the tax year 2022. The Department based its determination that additional IFTA taxes were due on the fact that Taxpayer had inadequate records. While Taxpayer had an internal control or procedure in place to validate tax-paid fuel credits, it did not have any additional internal controls, processes, or documentation to address several record keeping elements needed to verify distance and trip information. As a result, the Department imposed an additional assessment by reducing Taxpayer’s reported miles per gallon (“MPG”) by twenty percent per the Agreement. As a threshold issue, it is Taxpayer’s burden to establish that the existing proposed assessment is incorrect. As stated in IC 6-8.1-5-1(c): See also Indiana Dept. of State Revenue v. Rent-A-Center East, Inc., 963 N.E.2d 463, 466 (Ind. 2012); Lafayette Square Amoco, Inc. v. Indiana Dept. of State Revenue, 867 N.E.2d 289, 292 (Ind. Tax Ct. 2007). The Department notes that, “when [courts] examine a statute that an agency is ‘charged with enforcing . . . [courts] defer to the agency’s reasonable interpretation of [the] statute even over an equally reasonable interpretation by another party.’” Dept. of State Revenue v. Caterpillar, Inc., 15 N.E.3d 579, 583 (Ind. 2014). Thus, all interpretations of Indiana tax law contained within this decision shall be entitled to deference. The Agreement is an agreement between various United States jurisdictions and Canadian provinces allowing for the equitable apportionment of previously collected motor carrier fuel taxes. The Agreement’s stated goal is to simplify the taxing, licensing, and reporting requirements of interstate motor carriers such as Taxpayer. The Agreement itself is not a statute but was implemented in Indiana pursuant to the authority specifically granted under IC 6-6-4.1-14(a) and IC 6-8.1-3-14. Tax assessments of motor carrier fuel tax under the Agreement are presumed to be valid. IC 6-6-4.1-24(b). A taxpayer bears the burden of proving the assessment is incorrect. Id. A taxpayer also has a duty to maintain books and records and to respond to the Department’s request to review such records. IC 6-6-4.1-20; IC 6-8.1-5-4(a). These requirements are elaborated in the Agreement. IFTA Agreement, Article XII, § R1210.300 (2022) provides that the assessment made by the base jurisdiction is presumed to be correct and the burden lies on the licensee to establish, by a fair preponderance of evidence, that the assessment is erroneous or excessive. IFTA Procedures Manual, § P530 (2022) requires licensees to maintain distance records “adequate to enable the base jurisdiction to verify the distances traveled and fuel purchased by the licensee for the period under audit and to evaluate the accuracy of the licensee’s distance and fuel accounting systems for its fleet.” The licensee must keep records to “substantially document the operations of the licensee’s fleet.” Id. Specifically, distance records produced by means other than a vehicle-tracking system must show the following: IFTA Procedures Manual, § P540.100 (2022). Further, distance records using a vehicle-tracking system (“GPS”) should include: IFTA Procedures Manual, § P540.200 (2022). Taxpayer operated trucks on Indiana highways, consumed motor fuel, and traveled in other member jurisdictions as well. Thus, Taxpayer was subject to motor carrier fuel IFTA taxes. IC 6-6-4.1-4(a). Taxpayer did not provide adequate records during the initial audit. After receiving the audit results, Taxpayer submitted its protest requesting that the Department provide Taxpayer “another chance” to review its “IFTA quarter.” In its protest submission, Taxpayer stated it “didn’t have any logs” to provide the Department. However, Taxpayer did submit a spreadsheet listing all of Taxpayer’s loads for the audited period. Upon review of the spreadsheet, the Department determined that the record was still inadequate as it did not meet several requirements for distance record keeping under IFTA Procedures Manual, § 540.100 (2022). When a member jurisdiction finds that there are inadequate records, then the base jurisdiction shall impose an additional assessment by either “adjusting the licensee’s reported fleet MPG to 4.00 or 1.70 KPL; or reducing the licensee’s reported MPG or KPL by twenty percent.” IFTA Procedures Manual, § 570.100 (2022). As provided above, it is Taxpayer’s responsibility to maintain specific, detailed, and accurate records concerning its fuel purchases and jurisdiction miles traveled. Because Taxpayer lacks the required records, the Department’s original audit is reasonable and supported by the law and the IFTA Procedures Manual. Taxpayer has not shown the Department’s assessment is erroneous as required by IC 6-8.1-5-1(c). FINDING Taxpayer’s protest is respectfully denied. November 4, 2025 Replaces Finding Document: New