Argued and Submitted September 9, 2014
Department of Transportation. MCA0391.
Montgomery W. Cobb filed the briefs for petitioner.
Denise Fjordbeck, Attorney in Charge, argued the cause for respondent. On the brief were Ellen F. Rosenblum, Attorney General, Anna M. Joyce, Solicitor General, and Judy C. Lucas, Senior Assistant Attorney General.
Before Sercombe, Presiding Judge, and Hadlock, Judge, and Tookey, Judge.
[270 Or.App. 634] HADLOCK, J.
Petitioner Hendrickson Trucking, Inc., challenges a final order of the Oregon Department of Transportation (ODOT), which denied petitioner's request for reassessment of certain highway use taxes that ODOT had assessed against it. In that order, ODOT determined that petitioner had not timely requested reassessment and, further, that petitioner had " not made a showing of good cause for the failure to file the request in a timely fashion." On review, petitioner asserts that ODOT was required to hold a hearing on the issue of whether petitioner had good cause for the delay in requesting reassessment because a factual dispute existed on that point. Petitioner also argues that ODOT's order is not supported by substantial
reason, in that the order does not " explain which of the criteria for good cause it applied or how it reasoned from its factual contentions to the conclusion that those criteria were not met." Given those arguments, we review the order for legal error and for substantial reason, that is, to " determine whether [ODOT] provided a rational explanation of how its factual findings lead to the legal conclusions on which the order is based." Arms v. SAIF, 268 Or.App. 761, 767, 343 P.3d 659 (2015). For the reasons that follow, we vacate the order and remand for reconsideration.
This case involves Oregon's " weight-mile" or " highway use" tax, which is collected from motor carriers " for the maintenance, operation, construction and reconstruction of public highways," and for certain administrative costs. ORS 825.474(1).
" Under [the weight-mile] tax, a trucking carrier pays a rate for each mile that its trucks operate on the state's public highways. The tax is based on the weight that the carrier declares to be the truck's maximum legal weight; the higher the declared weight, the higher the per-mile tax for that truck. *** A carrier must maintain records of the declared weights of its trucks and the miles that they travel in order to make the required reports and calculate the amount of tax owed."
[270 Or.App. 635] American Trucking Assns., Inc. v. State of Oregon, 193 Or.App. 185, 188-89, 90 P.3d 15 (2004), aff'd in part, rev'd in part on other grounds, 339 Or. 554, 124 P.3d 1210 (2005) (footnote omitted).
Carriers generally report and pay the tax on a monthly basis. ORS 825.490(2). When practicable, ODOT audits those reports. ORS 825.490(3).
" If [ODOT] is not satisfied with the report filed or amount of taxes or fees *** paid to the state by any person, [ODOT] may, not later than three years after the report was filed or the taxes or fees were paid, make a proposed assessment of additional taxes or fees due from such person based upon any information available to the department."
Id. ODOT gives " written notice of such additional assessment" to " the person concerned." ORS 825.490(7). The person may petition ODOT for reassessment and request a hearing " within 30 days after service upon the person of notice." ORS 825.496(1).
In this case, ODOT notified petitioner in late 2011 that it would be auditing petitioner's " weight-mile" records for certain periods in 2009, 2010, and 2011, and it requested copies of the pertinent records. Petitioner provided those records to ODOT over the next few months. In February 2012, ODOT proposed a highway use tax assessment of roughly $350,000 based upon its review of petitioner's records, making adjustments for what ODOT determined to be " unreported mileage, weight adjustments and math discrepancies on reports." ODOT asked petitioner to submit any additional information that it wanted the auditor to consider, ultimately setting a deadline of April 10, 2012, for its receipt of that information. The record includes no indication that petitioner submitted any additional information by the April 10 deadline.
On April 26, 2012, ODOT sent a document titled " NOTICE OF HIGHWAY USE TAX ASSESSMENT - OFFICIAL BILLING" (the Notice and Billing) to petitioner by regular mail. That document reflected a total unpaid balance of over $353,000, including taxes, penalties, interest, [270 Or.App. 636] and other expenses. The Notice and Billing spelled out the method by which petitioner could petition for reassessment:
" PLEASE READ YOUR APPEAL RIGHTS ON THE BACK OF THIS DOCUMENT. You have 30 days from the date of this notice to file a petition for reassessment ***. Petitions for reassessment *** MUST BE RECEIVED in Salem, Oregon, on or before 5 pm of the date the audit ...