in-20250430-IR-045250171NRA: DEPARTMENT OF REVENUE

DEPARTMENT OF REVENUE LETTER OF FINDINGS: 42-20232254 International Fuel Tax Agreement (IFTA) Assessment For the Period January 1, 2021, to December 31, 2021 HOLDING Business was able to provide additional documents to reduce the proposed assessment; the Department will issue a supplemental audit bill, which will show a tax dollar reduction. ISSUE

I.    International Fuel Tax 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 Article XII, § R1210; IFTA Procedures Manual, § P530; IFTA Procedures Manual, § 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); INTERNATIONAL FUEL TAX AGREEMENT, https://www.iftach.org/manual2020.php. Business was able to provide additional documents to reduce the proposed assessment; the Department will issue a supplemental audit bill. STATEMENT OF FACTS Taxpayer is an Indiana business that provides trucking services. As the result of an audit, the Indiana Department of Revenue (“Department”) determined that, due to insufficient supporting documentation, Taxpayer had underreported the amount owed under the International Fuel Tax Agreement (“IFTA”). The Department issued a proposed assessment for IFTA taxes plus penalties and interest. Taxpayer protested the proposed assessment. The Department held an administrative hearing on September 9, 2024. This Letter of Findings results. Additional facts will be provided as necessary.

I.    International Fuel Tax Agreement Tax – Assessment.

DISCUSSION Taxpayer protests the imposition of additional IFTA taxes for the 2021 tax year. The Department based its determination that additional IFTA taxes were due on the fact that Taxpayer had inadequate records. The audit found that a substantial percentage of Taxpayer’s records were missing. 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 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. IFTA is an agreement between various United States jurisdictions and Canadian provinces allowing for the equitable apportionment of previously collected motor carrier fuel taxes. International Fuel Tax Agreement, https://www.iftach.org/manual2020.php (last visited February 4, 2025). 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 IFTA 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 agreement. IFTA Article XII, § R1210.300 (2017) 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 consumed motor fuel by operating trucks on Indiana highways and traveling to other member jurisdictions. Thus, Taxpayer was subject to motor carrier fuel IFTA taxes. IC 6-6-4.1-4(a). The initial audit found that a substantial portion of Taxpayer’s records were missing. Taxpayer later provided additional documents to the Department. A review of the additional records shows Taxpayer provided invoices that will change the assessment. As a result, the Department will recalculate the amount of IFTA taxes to the extent established by the documentation. To the extent Taxpayer’s additional documentation reduces the assessment, Taxpayer has partially met its burden imposed by IFTA and the Indiana Code. 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. 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. February 5, 2025 Replaces Finding Document at: New