Toward Enhancing Estimates of Kentucky's Heavy Truck Tax Liabilities

摘要

Kentucky has established a Road Fund tax structure that is partially based on the principle that the system users pay their fair share of the costs associated with maintaining a safe and efficient highway system in Kentucky. Several of the most important sources of Kentucky's road fund revenues derived from commercial trucking are dependent on the self-reported tax liabilities submitted by trucking firms. Self-reporting and the interstate nature of this industry allows for the possibility of tax evasion either due to fraudulent behavior or processing errors. To ensure the integrity of the system, the Revenue and Transportation Cabinets have an ongoing audit system. The effectiveness of the audit process depends, to some degree, on estimates of overall tax liabilities. These estimates allow the auditors to focus their efforts and resources at areas perceived to require attention, allowing for efficient administration tax enforcement. In the case of motor carriers, effective estimation tools are required in order for tax administrators and auditors to know how many tax dollars are owed to the state from commercial trucking taxes. Only with effective estimation models can evasion be observed and effectively combated. The focus of this report is the effectiveness and reliability of the current models employed to calculate the weight-distance tax and fuel surtax liabilities.