Senex Explosives, Inc. v.
Commonwealth, 91 A. 3d 101 (Pa.
2014)
Brief of Amicus Curiae
By: Clark L. Snelson
President, IFTA Attorney Section
Office of the Utah Attorney General
Presentation by: Sukanya Mukherjee
Comptroller of Maryland
Summary of Questions Presented
• Commonwealth Court erred in holding that vehicles exempt
under Pennsylvania Code 75 Pa. C.S. § 2105(a)(7) are also
exempt under IFTA.
• The Commonwealth Court erred in finding that the definition
of special mobile equipment under Pennsylvania Code 75 Pa.
C.S. § 102 and the definition of qualified motor vehicle under
IFTA were mutually exclusive.
Summary of Argument
• Senex elected to meet its fuel tax requirements in all
jurisdictions using PA as its base state, and by also electing to
include the 14 disputed vehicles licensed as special mobile
equipment in PA in its IFTA fleet, Sensex obligated itself to
report all miles traveled and fuel used by the disputed
vehicles whether PA would independently require those
vehicles to report and regardless of whether those miles
would be subject to tax.
Arguments
• I. Placing IFTA Decals on Vehicles Carries Consequences that
Impact All IFTA Jurisdictions:
• Commonwealth Court concluded that vehicles were exempt from
IFTA by virtue of PA law, despite the fact that vehicles were
credentialed to travel in all 58 IFTA jurisdictions. This granted an
exemption by PA beyond its border to all IFTA jurisdictions in
contravention of the terms of the IFTA agreement.
• Three core concepts at the heart of IFTA:
– (1) base state concept
– (2) the retention of each jurisdiction’s sovereign authority to determine its own tax
rates and exemptions
– (3) the definition of a qualified motor vehicle
•
IFTA Articles of Agreement, Article 1, § R.130.100
Arguments
• A. The Base State Concept Requires Reporting of All Vehicles
in the Fleet:
• By filing in its base state, Senex satisfied its fuel use tax
liability in all 58 jurisdictions. Senex has voluntarily
undertaken, its reporting all miles traveled by all vehicles in
the IFTA fleet. Additionally, Senex voluntarily placed
credentials on the disputed vehicles, thereby making them
part of the IFTA fleet
• Reporting miles traveled and fuel consumed makes it possible
to calculate MPG.
• Taxable miles traveled in each jurisdiction divided by the fleet
MPG yields jurisdictional fuel used, multiplied by the
jurisdictional rate yields the tax due.
Arguments
• Base concept is compromised by allowing the disputed
vehicles to be exempt from IFTA, including all the reporting
requirements.
• All participating jurisdictions rely on the reports filed with the
base state to accurately calculate fuel used and tax liability in
their respective jurisdictions.
• The Commonwealth Court’s determination that the vehicles
are exempt in PA and are also exempt from IFTA, threatens to
undermine the base state concept
Arguments
• B. Each Jurisdiction Retains Sovereign Authority to
Determine Its Own Exemptions:
• The effect of the Commonwealth Court’s decision is to export
the effect of that exemption to all participating IFTA
jurisdictions. Pennsylvania has thus extended it’s reach
through its valid exemption and infringed on the sovereignty
of those jurisdictions
• By placing IFTA decals on its vehicles and include those
vehicles in its IFTA fleet, Senex obtained the right to travel in
all 58 jurisdictions without having to obtain temporary fuel
use permits. Senex waived the statutory right granted by
Pennsylvania to not report those vehicles by voluntarily
choosing to place those vehicles in its IFTA fleet.
Arguments
• Pennsylvania courts have the full authority to interpret and
apply Pennsylvania law and to determine whether or not the
fuel used by special mobile equipment in Pennsylvania is
subject to tax. However, the legislatures of the 57 other
jurisdictions which are signatories to the IFTA agreement
retain their rights to determine their own exemptions.
Arguments
• C. The Definitions of Qualified Motor Vehicles are not
Mutually Exclusive:
• Regardless of how jurisdictions choose to exercise their
authority to determine exempt vehicles or exempt fuel use,
that any vehicle which meets the IFTA definition of qualified
motor vehicle or are declared to be qualified motor vehicles
by the licensee, report all their miles traveled and fuel
consumed “until such time as the decal becomes expired or
the vehicle is no longer under the licensees authority.”
– IFTA Articles of Agreement, Article VIII, § R.840 and IFTA Procedures Manual § P. 710
Conclusion
• By participating in IFTA, a carrier can meet its fuel use obligation
within 58 jurisdictions with a single filing. By electing to place
vehicles in the IFTA fleet, a carrier opens the doors of all of those
jurisdictions to travel without obtaining fuel use permits.
• In return, the carrier agrees to report all miles traveled and fuel
used by those vehicles and keep records which all the base
jurisdiction to determine each state’s liability and to collect and
remit taxes for each jurisdiction.
• Participating jurisdictions retain their sovereign authority to
determine their own tax rates and their own exemptions.
• Pennsylvania is free to determine the effect of its exemption on
Pennsylvania’s liability.
Conclusion
• Pennsylvania can fully exempt the miles traveled by those
vehicles in Pennsylvania without exempting those vehicles
from IFTA and while still requiring reporting of the vehicles as
contemplated under the IFTA Agreement.