• If a licensee does not file a tax report when due, the licensee will be served with an assessment from the base jurisdiction on behalf of all the other jurisdictions.
• It is the responsibility of the base jurisdiction to collect tax, penalty, and interest owed to all member jurisdictions resulting from an audit or assessment.

In the event that any licensee fails, neglects, or refuses to file a tax report when due, the base jurisdiction estimates the tax liability of the licensee for each jurisdiction owed and serves the assessment upon the licensee.

The assessment made by a base jurisdiction that follows procedural guidelines is assumed to be correct. In any case where the validity of the assessment is challenged, it is the responsibility of the licensee to prove with evidence that the assessment is incorrect.

If the base jurisdiction determines that the records produced by the licensee for audit do not appropriately meet the necessary criterion, or if a licensee produces no records after a written demand from the base jurisdiction, the base jurisdiction may impose an additional assessment by either:

• Adjusting the licensee’s reported fleet miles per gallon (MPG) to 4.00 or 1.70 kilometers per liter (KPL); or
• Reducing the licensee’s reported MPG or KPL by 20 percent.

An auditor may also issue an assessment if the carrier is unable to produce unused International Fuel Tax Agreement (IFTA) decals from previous years. Inability to produce IFTA decals from past years can result in an assessment anywhere from $200 - $30,000. Some jurisdictions may assess a flat fee per missing decal while others may estimate operations under the “missing” decals. This is not an issue in all jurisdictions, though, since some jurisdictions only issue enough decals to cover the current number of vehicles in a carrier’s fleet. In these jurisdictions, it’s not possible to obtain extra decals. In other jurisdictions, extra decals may be issued at the beginning of the year in case the carrier plans to add a vehicle to the fleet later in the year. Those extra decals, if not used, must be kept in a secure location as part of the IFTA records.

Collection of tax, penalties, and interest

The collection of tax, penalty, and interest owed to all member jurisdictions resulting from an audit or assessment is the responsibility of the base jurisdiction. Methods of collection will be governed by the laws of the base jurisdiction and the administrative procedures established by the agreement.

Appeal procedure

Assessments made for taxes due in any jurisdiction may be appealed to the base jurisdiction.