in-20260729-IR-045260249NRA: LETTER OF FINDINGS: 42-20253312

DEPARTMENT OF REVENUE LETTER OF FINDINGS: 42-20253312 International Fuel Tax Agreement For the Tax Year 2022 HOLDING Indiana trucking business was able to provide additional documents to reduce the proposed assessment; the Department will issue a supplemental audit bill. 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. After conducting a bulk fuel reconciliation analysis, the Department determined that 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 an administrative hearing while maintaining its protest. This Letter of Findings is 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 provided insufficient bulk fuel records. Taxpayer maintained two separate bulk fuel tanks and utilized a commercial bulk fuel management system during the tax year. Taxpayer provided some bulk fuel inventory records and purchase invoices during the initial audit. Taxpayer did not retain withdrawal logs from the system and, as such, could not provide them for the period under audit. Since Taxpayer’s bulk fuel purchase invoices and bulk withdrawal records were not provided by tank, the tanks were combined and the Department performed one bulk talk reconciliation. The reconciliation resulted in a material net negative amount of unreconciled bulk fuel, which was summed for the audit period and apportioned to each quarter of the audit period. 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. 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 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 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 provided additional 2022 bulk fuel purchase invoices for the Department to review during the protest process. A preliminary review of the documents provided shows that the new documents require further review and would most likely change Taxpayer’s liability. The Department will review the documentation submitted through the protest process and will confirm whether 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. Therefore, Taxpayer has met the burden imposed by IC 6-8.1-5-1(c) of proving the proposed assessment incorrect, to the extent verified by the Department’s review of the documentation supplied in the protest process. FINDING Taxpayer’s protest is sustained to the extent of that portion of the assessment they have already paid and denied to the extent of the remaining assessment balance. May 11, 2026 Replaces Finding Document: New