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Carrier Sues Illinois Over Rolling Stock Tax Exemption

April 16, 2014

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A trucking company has filed a lawsuit against the Illinois Department of Revenue over it disallowing the states rolling stock sales tax exemption on one of its pieces of equipment. 

At issue is the department's disallowance of a rolling stock exemption claimed by Illinois-based Seggebruch Trucking on the purchase of a Peterbilt truck, according to the Mid-West Truckers Association. The suit was filed after the company had paid a notice of tax liability issued by the department under protest.

The department's determination followed an audit conducted on the purchase. The company supplied information indicating during the first year of use, the truck made numerous trips from points in Illinois to grain terminals in Indiana. Also, the company made numerous trips from points in Illinois to grain terminals in Illinois, where the terminal operators had provided certification statements, indicating that a substantial portion of the grain delivered to its Illinois terminal was ultimately shipped outside the state on other common carriers. 

The company believed that they had provided sufficient information for the department to allow rolling stock on the truck in accordance with the department's regulations covering this exemption, said MTA. However, the department's audit staff ruled that only those miles where the vehicle actually traveled across state lines could be used in determining if the rolling stock exemption was applicable. It disqualified the intrastate miles the company had sought to include in its calculation.

The MTA is contacting its members about the lawsuit, especially if they are currently the subject of an audit or have been assessed tax based on disqualification of rolling stock. It advises them to contact the Illinois Department of Revenue asking that any further action be held up pending resolution of the Seggebruch Trucking case. 

“Anyone who has paid tax on vehicles and equipment felt to be rolling stock as a result of an audit, may wish to file a protective claim with the Department of Revenue to recoup the tax paid,” said the association.

It notes taxpayers have two years to file claims on money paid to the state and if this case takes a lengthy time to eventually be resolved, the ability to recoup the tax paid could be lost by waiting for a final answer.

MTA has also been working with several members who are involved in challenges to their rolling stock sales tax exemption, including those currently the subject of a Department of Revenue audit or have been assessed tax based on disqualification as a result of an audit.

 

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