How could fuel moved from a Florida terminal by tank trailer and vessel to the Bahamas qualify for Florida export-tax refunds?

Plain-English summary

Florida required fuel tax to be paid when the product left the terminal rack, followed by a credit or refund after documented export to the Bahamas.

The company planned to buy gasoline, diesel, aviation fuel, and jet fuel from a Florida terminal supplier. A contracted carrier would load the fuel into tank trailers, drive the trailers onto its vessel, and deliver them to the Bahamas.

That transportation was not a statutory bulk transfer because the fuel did not flow directly from the terminal into the vessel. The rack-removal tax therefore applied.

The ruling approved two routes. If the company was licensed as an exporter, it could pay the terminal supplier's Florida taxes and apply for a refund with documentation showing export from Florida and import into the Bahamas. Alternatively, the terminal supplier could retain title, withdraw and export the fuel, pay the taxes, and take a credit or request a refund with the same documentation.

What this means for you

Fuel exporters

Exporter licensing was essential to the company-purchase route. Export destination alone did not allow tax-free rack removal under the facts described.

Terminal suppliers

A supplier retaining title through export could handle the tax and recovery itself. Document ownership, rack removal, foreign movement, and Bahamas import.

Carriers and logistics teams

Moving tank trailers onto a vessel did not make the shipment a bulk transfer. The statutory definition was limited to pipeline or marine-vessel movement between terminals or from a refinery to a terminal.

Common questions

Q: Was tax due when the fuel left the Florida rack?
A: Yes.

Q: Was trailer movement onto the carrier's vessel a bulk transfer?
A: No.

Q: Could the purchasing company claim a refund?
A: Yes if it was licensed as an exporter, paid the tax, and kept proof of Florida export and Bahamas import.

Q: Could the terminal supplier claim the credit or refund instead?
A: Yes if it retained title, exported the fuel, paid the taxes, and kept the required documentation.

Q: What fuels were covered?
A: Gasoline, diesel fuel, aviation fuel, and jet fuel.

Q: Can another exporter rely on this TAA?
A: Not automatically. The advisement states that it binds the Department only on the fuel, licensing, title, carrier, rack, vessel, destination, and documentation facts described.

Citations and references

• Fla. Stat. § 206.41(6) — tax on fuel removed at a Florida terminal rack
• Fla. Stat. § 206.01(15), (20), (21) — bulk transfer, export, and exporter definitions
• Fla. Stat. §§ 206.02(1), 206.052, and 206.051(4) — exporter license and export credits or refunds
• Fla. Stat. § 206.20(4) — transporting untaxed motor or diesel fuel
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 96B-002

Original ruling text

TAA 96B5002

[[November 7, 1996]]

Re:TAA 96(B)-002
<>
XXXX (hereinafter referred to as Company)

XXXX (hereinafter referred to as Carrier)

Dear:

This is in response to your request for a Technical Assistance Advisement on the imposition of fuel tax on petroleum
products exported from Florida. This response is in addition to the Letter of Technical Advice on the same issue that

was mailed to you on August 28, 1996.

FACTS AS PRESENTED

Company will buy gasoline, diesel fuel, aviation fuel, and jet fuel from a licensed terminal supplier located in Florida.
The fuel purchased by Company will be loaded at the terminal into tank trailers owned by Carrier which is contracted
by Company. The tank trailers will be driven onto a vessel, also owned by Carrier, and the fuel delivered by the

vessel in the tank trailers to the Bahama Islands.

DISCUSSION AND LAW

The Florida fuel tax statutes were amended, effective on July 1, 1996, to impose fuel taxes at the loading rack of

terminals located within this State.

Section 206.41(6), F.S., provides in part:

(6) Unless otherwise provided for by this chapter, the taxes specified in subsection (1) are imposed on all of the
following:

(a) The removal of motor fuel in this state from a terminal if the motor fuel is removed at the rack.

Section 206.01(20), F.S., defines export as:

any removal of taxable motor or diesel fuels from this state other than by bulk transfer.

Section 206.01(15), F.S., provides:

"Bulk transfer" means the shipment of fuel by pipeline or marine vessel between terminals or from a refinery to a

terminal.

The shipment of fuel by means of tanker trailers, as described above, is not a bulk transfer because the fuel does not

flow directly from the terminal into Carrier's ship.

Note that s. 206.20(4), F.S., provides:

Except as authorized by this chapter, it is unlawful for any person to transport or cause to be transported any taxable
motor or diesel fuel, other than through bulk transfer, within this state, upon which the tax imposed by this part has not

been paid, including all fuels removed from bulk storage through a loading rack.

Section 206.01(21), F.S., defines exporter as:

any person that has met the requirements of s. 206.052 and that is licensed by the department as an exporter of
taxable motor or diesel fuels either from substorage at a bulk facility or directly from a terminal rack to a destination

outside the state.

Section 206.02(1), F.S., states:

(1) It is unlawful for any person to engage in business as a terminal supplier, importer, exporter, or wholesaler of
motor fuel within this state unless such person is the holder of an unrevoked license issued by the department to

engage in such business...

Section 206.052, F.S., provides:

(1) A licensed exporter may purchase from a terminal supplier at a terminal taxable motor fuels for export from this
state without paying the tax imposed pursuant to this part only under the following circumstances:

(a) The exporter has designated to the terminal supplier the destination for delivery of the fuel to a location outside the
state;

(b) The exporter is licensed in the state of destination and has supplied the terminal supplier with that license number;
(c) The exporter has not been barred from making tax-free exports by the department for violation of s. 206.051(5);
and

(d) The terminal supplier collects and remits to the state of destination all taxes imposed on said fuel by the
destination state.

(2) A licensed exporter shall not divert for sale or use in this state any fuel designated to a destination outside this
state without first obtaining a diversion number from the department as specified in s. 206.41(1)(d) and manually

recording that number on the shipping paper prior to diversion of fuel for sale or use in this state.

Subsection (1) of the section of the statute cited above requires that persons exporting fuel from this State must be

licensed as exporters.

Section 206.051(4), F.S., provides:

A licensed exporter shall be authorized to take a credit on its monthly fuel tax return or apply for a refund of all state

fuel tax and local option fuel tax paid on fuel exported from the state in compliance with this section....

Thus, Company, if licensed as an exporter, must pay Florida tax to such terminal supplier and apply for a refund by

providing documentary evidence that the fuel was exported.

However, if the terminal supplier causes the fuel to be exported from this State by retaining title to such fuel as the fuel
leaves Florida waters, the terminal supplier can take a credit on its monthly fuel tax return or apply for a refund of all

state fuel tax and local option fuel tax paid on the fuel exported.

CONCLUSION

Based on the provisions of the Florida Statutes cited, Company if licensed as an exporter may purchase the fuel and
pay the taxes on the fuel removed through the rack at the terminal and apply for a refund of taxes paid, provided

documentation is retained to show export from Florida and import into the Bahamas.

Alternately, the terminal supplier may withdraw the fuel, pay the taxes, export the fuel from Florida and take a credit or
apply for a refund of taxes paid, provided documentation is retained to show export from Florida and import into the

Bahamas.

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 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. Please note that we already have in file some documents

evincing some desired deletions.

Sincerely,

Lynwood Taylor
Senior Tax Specialist

Tax Policy and Dispute Resolution

LNT/Int
Con. # 26555