Did federal-agency propane vehicles need Florida alternative-fuel decals or pay the fuel tax?

Subject

Alternative Fuel Decal Fee

Plain-English summary

The federal agency's propane-powered vehicles did not need Florida alternative-fuel decals and were exempt from the associated alternative-fuel tax. The Department reasoned that Florida already exempted state and local government vehicles, and federal intergovernmental tax immunity barred discriminatory taxation of the federal government.

The source has an internal citation mismatch: its law discussion quotes section 206.877 and the excise tax referenced there as section 206.87, while its conclusion cites section 206.97.

What this means for you

The holding was limited to vehicles owned or operated by a federal agency. It relied on parity with the statutory state-and-local government exemption and the nondiscrimination principle in Davis v. Michigan Department of Treasury.

Common questions

Q: Did the federal vehicles need windshield decals? No.

Q: Did the agency owe the associated alternative-fuel tax? No, under the ruling's stated conclusion.

Q: Are the statutory references fully consistent? No. The ruling contains the section-number mismatch described above.

Citations and references

• Fla. Stat. § 206.877(9) — government alternative-fuel decal and tax exemption quoted in the ruling
• Fla. Stat. § 206.87 — alternative-fuel excise tax referenced in the quoted provision
• Fla. Stat. § 206.97 — section cited in the ruling's conclusion
• Davis v. Michigan Department of Treasury, 489 U.S. 803 (1989) — intergovernmental tax immunity and nondiscrimination
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 00B5-001

Original ruling text

TAA 00B5001
SUMMARY
QUESTION: Are alternative fuel decals required to be affixed to the windshields of vehicles owned or operated by an
agency of the federal government to purchase alternative fuel in this state?
ANSWER BASED ON FACTS BELOW: Because state and local governments are exempt from the requirement to
purchase alternative fuel decals, reliance on the decision rendered in the U.S. Supreme Court case Davis v. Michigan
Department of Treasury, 489 U.S. 803 (1989), also makes federal governmental agencies exempt from the
requirement to purchase alternative fuel decals, and from the imposition of fuel taxes on the purchase of alternative
fuel used in vehicles owned or operated by the federal agencies.

[[May 1, 2000]]

Re:Technical Assistance Advisement 00B5-001
<>
XXX (hereinafter referred to as Taxpayer)
Dear :
This is in response to your request for a Technical Assistance Advisement on whether the Taxpayer is exempt from
the alternative decal fee, and the requirement for vehicles powered by alternative fuel to have affixed to the windshield
an Alternative Fuel Decal.
FACTS AS PRESENTED
The Taxpayer operates approximately 36 dedicated propane vehicles. A local fuel provider refused to place
alternative fuel in one of the vehicles because the vehicle was without the required Alternative Fuel Decal.
All propane-powered vehicles within the Taxpayer's fleet are vehicles purchased in a state or territory other than
Florida. The Taxpayer operates an on-site fuel station which is equipped with an alternative fuel storage tank with a
capacity in excess of 500 gallons.
DISCUSSION AND LAW
Section 206.877, Florida Statutes, governs this issue and provides in pertinent part:
... (9) A state or local governmental agency is not required to obtain a decal and pay the annual decal fee imposed by
this section for a motor vehicle which it operates which is powered by alternative fuel. The excise tax imposed by s.
206.87 does not apply to purchases of alternative fuel for such vehicles.

Moreover, to subject the XXX to taxation in a manner that differs from tax provisions applicable to state and local
government appears contrary to the findings of the U.S. Supreme Court in Davis v. Michigan Department of Treasury,
489 U.S. 803 (1989). In that case the Court upheld the doctrine of intergovernmental tax immunity, which, generally,
bars state taxes that discriminate against the federal government.
CONCLUSION
Based upon the ruling in the U.S. Supreme Court case, Davis v. Michigan Department of Treasury, the Taxpayer is
exempt from the requirement to purchase Alternative Fuel Decals, and exempt from fuel taxes imposed under s.
206.97, F.S.
This response constitutes a Technical Assistance Advisement under s. 213.22, F.S., which is binding on the
Department only under the facts and circumstances described in the request for this advice as specified in s. 213.22,
F.S. Our response is based on those facts and the specific situation summarized above. You are advised that
subsequent statutory or administrative rule changes or judicial interpretations of the statutes or rules upon which this
advice is based may subject similar future transactions to a different treatment than expressed in this response.
You are further advised that this response, your request and related backup documents are public records under
Chapter 119, F.S., which are subject to disclosure to the public under the conditions of s. 213.22, F.S. Your name,
address, and any other details which might lead to identification of the taxpayer must be deleted before disclosure. In
an effort to protect the confidentiality of such information, we request you provide the undersigned with a redacted
copy of your request for Technical Assistance Advisement, backup material and response by April 29, 2000.
Sincerely,
Lynwood Taylor
Tax Law Specialist
Technical Assistance
& Dispute Resolution
LNT/lt
Enclosure
Control No. 40046