in-20260729-IR-045260248NRA: LETTER OF FINDINGS: 42-20252291

DEPARTMENT OF REVENUE LETTER OF FINDINGS: 42-20252291 International Fuel Tax Agreement For the Tax Year 2023 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; 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. The Department determined that, due to adequate records not being available during the initial audit, 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 and submitted additional documentation that was not analyzed in the Department’s initial audit. After initially requesting an administrative hearing, Taxpayer subsequently waived its right to a hearing while maintaining its protest. This Letter of Findings is therefore based on the materials sent in by Taxpayer with its protest submission and on 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 2023. The Department based its determination that additional IFTA taxes were due on the fact that adequate records were not reviewed during the initial audit. Taxpayer did not provide appropriate and sufficient distance records. Taxpayer’s distance records lacked several elements needed to verify distance; therefore, distance could not be audited. Taxpayer’s fuel documents consisted of paper receipts which included many of the required record keeping components. Taxpayer did not have any internal controls or processes to (1) capture and check required trip information for appropriate content, (2) verify the accuracy of the trip distance, (3) check the trip information for continuity of dates, travel points and odometer readings, (4) check the trip information for jurisdictional continuity, (5) ensure distance and fuel are reported in the same quarter, (6) conduct an miles-per-gallon (“MPG”) analysis by vehicle, or (7) validate tax-paid fuel credits. Therefore, Taxpayer’s records were deemed inadequate. As a result, the Department imposed an additional assessment by reducing Taxpayer’s reported MPGs by twenty percent per the Agreement. 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 protested the proposed assessment and submitted additional distance and fuel records that were not included in the initial audit. A preliminary review of Taxpayer’s supplemental documentation shows that further examination is needed and that the Department would most likely amend Taxpayer’s liability. The Department will review the documentation submitted through the protest process and confirm if it will result in a change to the liability. If so, the Department will recalculate the amount of IFTA taxes due based on the adequacy of Taxpayer meeting its reporting requirement burden. 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 explained above but denied in part as Taxpayer is not entitled to a waiver of the full amount. May 29, 2026 Replaces Finding Document: New