in-20250917-IR-045250442NRA: DEPARTMENT OF STATE REVENUE

DEPARTMENT OF STATE REVENUE FINAL ORDER DENYING REFUND: 47-20242444 Proportional Use Fuel Tax Credit For the Year 2023 HOLDING Out-of-state motor carrier failed to meet its burden of establishing that it submitted its Proportional Use Credit (“PUC”) claim within the quarterly period for which the proportional credit was claimed. ISSUE

I. Motor Carrier Fuel Tax – Proportional Use Credit Refund.

Taxpayer argues it timely filed a refund claim based on its proportional use credit. STATEMENT OF FACTS Taxpayer is an out-of-state motor carrier that provides, in part, services in the utility construction industry. Taxpayer electronically submitted a Claim for Proportional Use Credit (“MCS-1789”) request for the fourth quarter of 2023 (“Q4 2023”) on January 29, 2024, through the Motor Carrier Services’ online portal. Taxpayer sought a refund in motor carrier fuel tax for Q4 2023. Taxpayer claimed credit for fuel consumed during Q4 2023. The Indiana Department of Revenue (“Department”) denied Taxpayer’s claim for a refund. The denial letter explained the reason for denying the refund: Taxpayer disagreed with the decision and submitted a protest to that effect. In that protest, Taxpayer argued that the Department was wrong when it denied the refund on the grounds that the claim was untimely filed.

I. Motor Carrier Fuel Tax – Proportional Use Credit Refund.

DISCUSSION The issue is whether Taxpayer has established that it timely filed its refund claim with the Department. In its initial refund review, the Department determined that Taxpayer’s claim was untimely. Taxpayer protests the denial of the refund. Taxpayer argues that it electronically submitted its claim filing to the Department before the due date of the quarterly return for the taxable period for which the proportional use credit was claimed. See IC 6-6-4.1-4.8. The corresponding due date to file a PUC refund claim for Q4 2023, per statute, was January 31, 2024. The credit is authorized under IC 6-6-4.1-4.8, which requires the Department to refund tax based on a carrier’s “proportional use” of motor fuel. IC 6-6-4.1-4.8(c) provides: IC 6-6-4.1-4.8(d) imposes a “cap” on the dollar amount carriers may be refunded each year. In part, IC 6-6-4.1-4.8(d) provides: IC 6-6-4.1-4.8(c) provides additional requirements specifically addressing instances in which the total amounts claimed exceed the $3,500,000 limit. IC 6-6-4.1-4.8(b) explains the means by which a carrier is required to submit its claim. In part, the statute provides: IC 6-6-4.1-10 requires that a “carrier shall submit each quarterly report required under this subsection on or before the last day of the month immediately following that quarter.” IC 6-8.1-6-7 permits the Department to consider electronically filed documents; “notwithstanding any other provisions of this title, the commissioner may permit the filing of any return or document by electronic data submission.” The Department is required to address claims submitted on the MCS-1789 form. The form explains that in order to claim the credit, the carrier must, in part, “File the quarterly IFTA-101 or MCFT-101 tax returns on or before the due date shown on the return” and “Submit the [MCS-1789] by the due date on the form.” Here, the prescribed due date for a PUC refund claim is the filing deadline for the relevant quarterly taxable period. The filing deadline for the quarterly taxable period for Q4 2023 was January 31, 2024. Though Taxpayer electronically submitted its PUC refund claim online for Q4 2023 prior to the deadline, Taxpayer failed to provide the Department with a copy of the corresponding IFTA quarterly tax return before the statutorily required deadline. As such, Taxpayer’s PUC refund claim was incomplete at the time of the deadline. In its protest submission, Taxpayer argued that it filed its PUC refund claim for Q4 2023 on January 29, 2024, using the online filing system. Taxpayer stated the Q4 2023 PUC refund claim was the first time it filed such a claim online, and that it previously mailed its PUC refund claims by carrier to the Department. Taxpayer stated that it waited approximately three months for the filing to be processed before following up with the Department to check on the status of its claim (allowing for the typical processing time for PUC refund claims). Taxpayer stated that it was unaware that the Department had not received its IFTA documentation when it checked on the status of its PUC refund claim, so Taxpayer claims it subsequently emailed the IFTA return to the Department following its status check. Taxpayer further stated that prior to filing its PUC refund claim online for the first time it previously mailed its PUC refund claim and IFTA documents by postal carrier to the Department. In assessing Taxpayer’s objection, the Department bears in mind that the general rule is that “tax exemptions are strictly construed in favor of taxation and against the exemption.” Indiana Dep’t of State Revenue v. Kimball Int’l Inc., 520 N.E.2d 454, 456 (Ind. Ct. App. 1988). Based on the plain reading of IC 6-6-4.1-4.8, Taxpayer is required to provide the Department a copy of its quarterly tax return on or before the deadline of the relevant tax quarter. The Department’s determination that Taxpayer’s claim was untimely rests on the fact that Taxpayer failed to provide its quarterly tax return to the Department by the due date. Timing is vital for the calculation and disbursement of PUC to eligible filers. Calculations and disbursements are based on timely filing, which allows the Department to adhere to applicable law. Though the Department acknowledges Taxpayer’s admission of misunderstanding the PUC refund claim process, Taxpayer has not submitted any evidence to the Department showing that it provided its quarterly tax return to the Department before the deadline. Furthermore, Taxpayer has not referred to any statute, regulation, or court case which would permit the Department to process its PUC refund claim without also providing a tax return by the mandatory deadline, as required by Indiana law. Taxpayer has not proven that it timely filed a completed PUC refund claim with all the required documentation. Therefore, the protest is respectfully denied. FINDING Taxpayer’s protest is respectfully denied. July 18, 2025 Replaces Finding Document: New