in-20250827-IR-045250421NRA: INDIANA DEPARTMENT OF REVENUE

INDIANA DEPARTMENT OF REVENUE SUPPLEMENTAL LETTER OF FINDINGS: 42-20242801 International Fuel Tax Association, Inc. Assessment For the Tax Year 2022 HOLDING Taxpayer was able to provide additional documents to reduce the proposed assessment; the Department will issue a supplemental audit bill. ISSUE

I. IFTA Agreement Tax – 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; IFTA Procedures Manual, §§ P530 and P540; 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”) 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 Articles of Agreement (“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, claiming to possess additional documentation that was missing from the initial audit. Taxpayer provided additional documentation to the Department and attended a scheduled administrative hearing. This Letter of Findings results. Additional facts will be provided as necessary.

I. IFTA Agreement Tax – 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 paper receipts, 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 was also unable to provide documentation of any 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): 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 (2017) 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 (2017). Further, distance records using a vehicle-tracking system (“GPS”) should include: IFTA Procedures Manual, § P540.200 (2017). Taxpayer operated trucks 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 purchase 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 more fuel records. Taxpayer attended the hearing and provided a brief explanation and again, reiterated its position that the new documents should be reviewed. It was determined that Taxpayer provided additional relevant documents for the Department to review. A preliminary review of the documents provided shows that the new documents require further examination and would most likely change the Taxpayer’s liability. The Department will review the documentation submitted through the protest process and will confirm if the documentation will result in a change to the liability. After that, the Department will recalculate the amount of IFTA taxes due to the extent established by that documentation. To the extent Taxpayer’s records are adequate to verify some additional fuel used, Taxpayer has partially met its burden imposed by IFTA and the Indiana Code. FINDING Taxpayer’s protest is sustained to the extent explained above, but denied in part as Taxpayer is not entitled to a waiver of the full amount. June 27, 2025 Replaces Finding Document: New