DEPARTMENT OF STATE REVENUE
65-20221678.LOF
Letter of Findings: 65-20221678
Indiana Overweight Civil Penalty
For The Year 2022
NOTICE: IC 6-8.1-3-3.5 and
IC 4-22-7-7 require the publication of this document in the Indiana Register. This document provides the general public with information about the Indiana Department of Revenue's official position concerning a specific set of facts and issues. This document is effective on its date of publication and remains in effect until the date it is superseded or deleted by the publication of another document in the Indiana Register. The "Holding" section of this document is provided for the convenience of the reader and is not part of the analysis contained in this Letter of Findings.
HOLDING
Motor Carrier provided sufficient evidence that the civil penalty should be reduced.
ISSUE
I. Motor Vehicles - Overweight Penalty.
Taxpayer protests the assessment of an overweight civil penalty.
STATEMENT OF FACTS
Taxpayer is a Michigan-based trucking company. On September 22, 2022, the Indiana State Police ("ISP") cited Taxpayer's commercial motor vehicle for an overweight violation for being overweight on an axle group. As a result, the Indiana Department of Revenue ("Department") issued Taxpayer a proposed assessment for an overweight violation under
IC 9-20-18-14.5(d).
Taxpayer protested the assessment. The Department held an administrative hearing with the Taxpayer. This Letter of Findings results. Additional facts will be provided as necessary.
I. Motor Vehicles - Overweight Penalty.
DISCUSSION
Taxpayer protests the imposition of a penalty for an overweight violation of one of its trucks. Taxpayer argues that the penalty should be waived.
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):
The notice of proposed assessment is prima facie evidence that the [D]epartment's claim for the unpaid tax is valid, including during an action appealed to the tax court under this chapter. The burden of proving that the proposed assessment is wrong rests with the person against whom the proposed assessment is made.
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.
According to
IC 9-20-1-1, "[e]xcept as otherwise provided in [IC Art. 9-20], a person, including a transport operator, may not operate or move upon a highway a vehicle or combination of vehicles of a size or weight exceeding the limitations provided in [IC Art. 9-20]."
According to
IC 9-20-1-2, the owner of a vehicle "may not cause or knowingly permit to be operated or moved upon a highway [in Indiana] a vehicle or combination of vehicles of a size or weight exceeding the limitations provided in [IC Art. 9-20]."
IC 9-20-18-14.5 authorizes the Department to impose civil penalties against motor carriers that obtain a permit under IC Art. 9-20 and violate IC Art. 9-20 ("Permit Violation Civil Penalty") or are required, but fail, to obtain a permit under IC Art. 9-20 ("No Permit Civil Penalty"). The Department may also impose a civil penalty for vehicles or loads in excess of the size or weight limits provided in IC Art. 9-20 and for which no permit is available for the excess size or weight ("No Permit Available Civil Penalty").
IC 6-8.1-1-1 states that fees and penalties stemming from IC Art. 9-20 violations are a "listed tax." Under
IC 9-20-18-14.5(a) these listed taxes are in addition to and separate from any settlement or agreement made with a local court or political subdivision regarding the traffic stop.
IC 9-20-18-7 provides defenses which taxpayers may rely on when they submit their protest to the Department.
ISP cited Taxpayer's vehicle for being 920 pounds overweight on one axle group in violation of
IC 9-20-4-1. The Department imposed a "No Permit Available Civil Penalty" in accordance with
IC 9-20-18-14.5(d) because Taxpayer was in excess of the legal per axle group weight. Under IC Art. 9-20, no permit is available for instances where axles are overweight.
Taxpayer argued that their enterprise risk management ("ERM") system caused the error in weight distribution. Taxpayer provided that it goes to great lengths to avoid any issues, and the calibration of its ERM system is meant to prevent issues like the one in this case by providing loadout patterns. Taxpayer stated that it had recently gone through an upgrade of its system, which caused the error in the weight distribution. Taxpayer provided Bill of Lading (BOL) to the Department to support its claims. Taxpayer assured the Department that the error will never happen again. The Department recognizes Carrier's efforts to avoid overweight issues in the future, however, none of these explanations established that the weight of the axle group was under the allowable weight. Therefore, Carrier has not met the burden of proving the proposed assessment wrong, as required by
IC 6-8.1-5-1(c) and the penalty cannot be waived.
While Taxpayer has not established that the axle group in question was not over the allowed weight,
IC 9-20-18-14.5 provides "not more than" language for the Department to consider when generating a proposed assessment amount. Considering Taxpayer's history of compliance at the time of this inspection and information gathered during the protest process, the Department will generate a proposed assessment with a reduced amount as authorized by its statutory discretion and this Letter of Findings.
FINDING
Taxpayer's protest is sustained in part and denied to the extent that Taxpayer did not prove the entire penalty should be removed.
Posted: 07/26/2023 by Legislative Services Agency
DIN: 20230726-IR-045230567NRA
Composed: May 29,2024 5:51:39PM EDT
A
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