in-20250917-IR-045250440NRA: DEPARTMENT OF REVENUE

DEPARTMENT OF REVENUE LETTER OF FINDINGS: 42-20242388 International Fuel Tax Agreement For the Tax Year 2022 HOLDING Business was not able to meet its burden of proving the proposed assessment was wrong; therefore, the assessment remains as issued. ISSUE

I. IFTA – 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 Articles of 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 proposed assessment of additional International Fuel Tax Association, Inc. (“IFTA”) Articles of Agreement (“IFTA Agreement”) taxes. 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 IFTA Agreement. However, the Department could not complete a standard audit due to a lack of adequate records from the Taxpayer. In accordance with IFTA guidelines, the Department issued a proposed assessment. Taxpayer protested the proposed assessment and submitted additional documentation with the protest filing. An administrative hearing was conducted during which Taxpayer explained the basis for its protest. This Letter of Findings results. Additional facts will be provided as necessary.

I. IFTA – 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. Taxpayer’s available fuel documents included by-unit summaries and third- party transaction listings, and the available distance documents were sourced from a computer routing system. However, Taxpayer’s distance records did not include odometer readings for each trip. Taxpayer operated one truck during the audit period, so a miles-per-gallon analysis was calculated for each quarter; however, Taxpayer was also unable to provide documentation of any other internal controls or processes to verify distance and fuel records. As a result, the Department adjusted the reported figures for each quarter of the audit period per the IFTA guidelines. As a threshold issue, it is Taxpayer’s responsibility to establish that the existing proposed assessment is incorrect. As stated in IC 6-8.1-5-1(c): The notice of proposed assessment is prima facie evidence that the [D]epartment’s claim for the unpaid tax is valid, including during an action appealed to the tax court under this chapter. The burden of proving that the proposed assessment is wrong rests with the person against whom the proposed assessment is made. 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 IFTA 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 IFTA Agreement’s stated goal is to simplify the taxing, licensing, and reporting requirements of interstate motor carriers such as Taxpayer. The IFTA 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 IFTA 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 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 IFTA 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. The 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: .005 the beginning and ending dates of the trip to which the records pertain .010 the origin and destination of the trip .015 the route of travel .020 the beginning and ending reading from the odometer, hubodometer, engine control module (ECM), or any similar device for the trip .025 the total distance of the trip .030 the distance traveled in each jurisdiction during the trip .035 the vehicle identification number or vehicle unit number IFTA Procedures Manual, § P540.100 (2022). Further, distance records using a vehicle-tracking system (“GPS”) should include: .005 the original GPS or other location data for the vehicle to which the records pertain .010 the date and time of each GPS or other system reading, at intervals sufficient to validate the total distance traveled in each jurisdiction .015 the location of each GPS or other system reading .020 the beginning and ending reading from the odometer, hubodometer, engine control module (ECM), or any similar device for the period to which the records pertain .025 the calculated distance between each GPS or other system reading .030 the route of the vehicle’s travel .035 the total distance traveled by the vehicle .040 the distance traveled in each jurisdiction .045 the vehicle identification number or vehicle unit number IFTA Procedures Manual, § P540.200 (2022). Taxpayer operated a truck in Indiana, on Indiana highways, and 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). As provided above, it is Taxpayer’s responsibility to maintain specific, detailed, and accurate records concerning its fuel purchases and jurisdiction miles. Taxpayer did not provide adequate records during the initial audit. After receiving the audit results and submitting the protest, the Taxpayer submitted some odometer readings. Taxpayer attended the hearing and provided a brief explanation and again, reiterated its position that the new documents should be reviewed. A preliminary analysis of the supplemental documents provided shows that the odometer readings came from an electronic tracking system but did not provide any documentation verifying the locations traveled within each jurisdiction. Without confirming information for starting and ending points for the trips, the Department does not consider the supplemental information verified or verifiable. As such, the additional documentation is insufficient and does not change the audit’s initial assessment. Taxpayer has not met the burden imposed by IFTA Agreement, Article XII, § R1210.300 (2022) and by IC 6-8.1-5-1(c). FINDING Taxpayer’s protest is respectfully denied. July 17, 2025 Replaces Finding Document: New