IFTA Audit Upheld by Pennsylvania Court
On February 8, the Pennsylvania Commonwealth Court upheld an audit conducted by the state on one of its motor carriers under the International Fuel Tax Agreement (IFTA). The carrier’s problem in the audit apparently was bad record-keeping, according to a report on the case in the February 17 issue of the State Laws Newsletter. Among the missing or inadequate items were receipts and trip reports.
As IFTA requires, Pennsylvania had denied credit for any tax that might have been paid on fuel for which the receipts were missing or bad, reduced to 4.0 the mileage of vehicles that had been reported at over 7 mpg, and assessed at 4.0 mpg the mileage of vehicles for which it deemed the records insufficient. The assessment was for tax due on more than 1 million gallons of fuel.
The carrier contested that the state should have applied best-information-available audit techniques, including an examination of the carrier’s reports following the audited period, when its record-keeping had improved. Although sympathetic, the court noted that IFTA, as well as state law, required detailed records to be kept.