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An Indiana motor carrier must pay an additional assessment after an audit found that the company had underreported vehicle mileage, distorting its tax liability under the International Registration Plan (IRP).

The Indiana Department of Revenue (DOR) determined that additional IRP fees were due when the carrier did not have beginning and ending odometer readings available for review and verification of the IRP reports submitted by the carrier for that year. The DOR also noted that carrier's reports did not include longitudinal and latitudinal information. Based on those deficiencies, DOR considered the records incomplete and used revised distance and mileage figures, which is the remedy available for jurisdictions under IRP. Those calculations showed that additional IRP fees were due.

Data must be “adequate”

The carrier claimed that its reports were based on global positioning system (GPS) readings and that the reports it filed were therefore reliable and accurate, even if the GPS readings did not include beginning and ending odometer readings.

Under the IRP, the following elements are considered adequate for records produced by a vehicle-tracking system, including a system based on a GPS:

  • Original GPS or other location data for the vehicle to which the records pertain;
  • Date and time of each GPS or other system reading;
  • Location of each GPS or other system reading;
  • Beginning and ending reading from the odometer, hub odometer, engine control module (ECM), or any similar device for the period to which the records pertain;
  • Calculated distance between each GPS or other system reading;
  • Route of the vehicle’s travel;
  • Total distance traveled by the vehicle;
  • Distance traveled in each jurisdiction; and
  • Vehicle identification number or unit number.

These records allow the base jurisdiction to:

  • Verify the distances a registrant has reported on its application, and
  • Evaluate the registrant’s distance accounting system.

If the records made available by a carrier for audit are (a) sufficient and (b) appropriate for these purposes, they are deemed to be adequate.

Source documents are required

In this case, the carrier provided only the totals in the records of its activities. This documentation was insufficient to verify the reported miles driven or fuel purchased. Total sheets showing summaries of operations are not valid records to verify carrier-generated IRP renewals. In this case there was no source documentation supporting the total sheets, as the carrier provided no vendor-generated records of its activities.

Key to remember

Under IRP, you need to keep records that reflect all activity of every apportioned vehicle, whether loaded, empty, bobtailed, or deadhead. Also keep all fuel and distance records, including the source documents from the drivers and the monthly/quarterly/annual summaries by vehicle and fleet.