Could a licensed interstate carrier prorate Florida special-fuel tax when dedicated owner-drivers bought fuel and the carrier reimbursed them separately?

Subject

Proration of Fuel Tax by Common Carriers

Plain-English summary

The carrier qualified to prorate Florida special-fuel tax on the stated interstate operations. It was licensed both as a special-fuel dealer and for interstate commerce, and the owner-driver trucks hauled exclusively for it under its license and direction.

The carrier directly reimbursed the drivers for purchased gallons through payments separately identifiable from other lease compensation. The statutory proration also required payment of a similar tax to another state, Florida tax on fuel brought into and used in Florida, and records of trips and gallons carried across state lines.

What this means for you

Using owner-operated trucks did not prevent proration when the carrier controlled the interstate hauling and could document the fuel reimbursements, tax payments, trips, and gallons required by the statute.

Common questions

Q: Did the trucks have to be owned by the carrier? No, on these facts; they were owner-driver trucks operating exclusively under the carrier's license and direction.

Q: Did reimbursement need to be separately identifiable? Yes.

Q: Were records required? Yes, including interstate trips and gallons carried out of and into Florida.

Citations and references

• Fla. Stat. § 206.87(3)(g) — special-fuel tax for interstate motor vehicles
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 93B5-001

Original ruling text

TAA 93B5001
Title:<>

[[June 14, 1993]]

Re:Request for Technical Assistance Advisement - 93(B)5-001 Whether XXXX will qualify for the proration of the
taxes specified under Section 206.87, F.S. by meeting the following conditions.
Dear
DISCUSSION OF FACTS
The facts of the matter under advisement as stated by your letter are as follows:
FROM YOUR MARCH 9, 1993, LETTER
"The taxpayer is engaged in interstate commerce through contractual relationships with truckers to carry its products
under the following terms:
1.The taxpayer is a licensed dealer in special fuels.
2.The taxpayer is licensed by the Interstate Commerce Commission.
3.Trucks carrying goods for the taxpayer are engaged under contractual relationships with the truck driver/owners
such that (a) the trucks are operated under the taxpayer's ICC license and (b) the drivers and the trucks haul
exclusively for the taxpayer. Any hauling made by the truckers is done directly through and under the direction of the
taxpayer.
4.Under its contractual relationships the taxpayer will directly reimburse the truck driver/owner for the gallons of fuel
purchased by the trucker. The taxpayer will make a specific payment to the trucker for the fuel purchases by the truck
driver.
The other payments pursuant to the lease agreements will be made as separate payments identifiable from the
amounts of fuel reimbursed to the trucker by the taxpayer. The fuel reimbursed to the truck driver will be treated as a
reduction in the total amount otherwise due to the trucker under the contractual agreement, but in all events there will
be a direct reimbursement of fuel costs to the truck driver/owner by the taxpayer."

REQUESTED ADVISEMENT

You seek an affirmative determination providing that if a taxpayer is substantially in compliance with the conditions
described above, the taxpayer will qualify for the proration of the taxes specified under Section 206.87, F.S.
DISCUSSION AND ANALYSIS OF LAW
Based on the facts presented in your letter, the taxpayer is a licensed dealer of special fuel and licensed by the
Interstate Commerce Commission to engage in interstate travel and commerce. As a licensed dealer of special fuel,
the taxpayer may purchase special fuel exempt from the tax imposed by s. 206.87, F.S., and shall act as agent for the
state in the collection and payment of this tax.
A licensed dealer of special fuel may exercise the exemption granted under s. 206.87 (3)(g), F. S., provided the dealer
is in compliance with all conditions set forth in s. 206.87(3)(g), F.S.
These conditions are:
"Transfers or deliveries of special fuel into the fuel supply tank of a motor vehicle regularly engaged in interstate travel
when such fuel is used on the highways of another state, provided:
1.The transfer or delivery occurs within this state and is executed by a duly licensed dealer who is regularly engaged
in interstate travel;
2.A tax similar to taxes paid pursuant to this part and chapter 212 is paid in another state; and,
3.The tax is paid to this state on all special fuel brought into the state and used in this state.
Any licensed dealer claiming such exemption must have evidence of the payments of such tax and must keep records
showing the number of trips out of the state, the number of trips into the state, the number of gallons of special fuel
carried out of state in fuel tanks, and the number of gallons brought into the state in fuel tanks for use in this state...."
Under these conditions, a dealer of special fuel is given the option to prorate the tax on fuel used in motor vehicles
that are regularly engaged in interstate travel for commercial purposes.
DETERMINATION
The foregoing presentation of law evidences the intent of the legislature to provide an exemption of the tax imposed
under S. 206.87, F.S., to licensed dealers of special fuel engaged in interstate state travel for commerce. However,
certain requirements were placed on such dealers to insure that tax was paid by the dealer to this state on all special
fuel used in this state regardless of where purchased. Based on the facts presented, your client has met all such
requirements necessary to utilize this exemption.
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 predicated 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 and your request 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 by the Department before disclosure. In an effort to
protect the confidentiality of such information, we request you notify the undersigned in writing within 15 days of any
deletions you wish made to the request or the response.
Sincerely,

Warren Williams
Tax Law Specialist
Bureau of Technical Assistance
and Training
Enclosure