in-20260729-IR-045260247NRA: LETTER OF FINDINGS: 42-20252205

DEPARTMENT OF REVENUE LETTER OF FINDINGS: 42-20252205 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. The Department determined that, due to inadequate records, 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, claiming to possess additional documentation that was missing from the initial audit. Taxpayer waived it right to a hearing while maintaining its protest. Taxpayer provided additional records. This Letter of Findings is therefore based on materials sent in by Taxpayer during the protest process 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 inadequate records. Taxpayer did not provide the Department with any distance or fuel records for the initial audit; therefore, distance could not be audited, and no tax-paid fuel credits were allowed. Due to the lack of available information or records, Taxpayer’s internal controls or processes could also not be tested. 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 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 the 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 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: 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 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 its protest, Taxpayer furnished distance and fuel records to the Department for review. It was initially determined that Taxpayer’s records included information such as unit odometer readings, jurisdictional distance, trip origin and destination, as well as trip dates. Based on this preliminary analysis of the documents provided, further examination is required and the records would most likely change 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, if any, to the extent established by that documentation. To the extent Taxpayer’s records are adequate to verify some additional fuel used, Taxpayer has met its burden imposed by the Agreement and IC 6-8.1-5-1(c). FINDING Taxpayer’s protest is sustained to the extent that a supplemental audit will be conducted, and a supplemental notice of proposed assessment issued, consistent with this Letter of Findings. May 28, 2026 Replaces Finding Document: New