Could a city operating county-leased buses for fixed-route and demand-response public service claim Florida's mass-transit fuel tax credit?

Plain-English summary

Florida found that the city provided qualifying mass public transportation and could claim the fuel tax credit once licensed as a mass transit system by the Department.

Under an interlocal agreement, the county leased four transit coaches to the city. The city had sole control, direction, and expense of their operation. The coaches served the general public on a nonexclusive basis through fixed-route and demand-response service, and charter use was prohibited.

Florida's statute covered public transportation by bus over prescribed routes and included demand service integral to a city or other public transit system. It excluded over-the-road or charter systems and independent taxi or limousine operations.

Because the city's service fit the statutory definition, the Department held that it was entitled to the credit under section 206.41(4)(a) when properly licensed.

What this means for you

Cities and transit authorities

Leasing the buses from another public body did not prevent qualification. The operating city's control and the public, noncharter character of the service drove the result.

Transit managers

Maintain the interlocal agreement, service maps, demand-response documentation, fare-change hearing records, operating expenses, and Department mass-transit license.

Accountants and tax professionals

The ruling conditioned the credit on licensing. Confirm that fuel was used in the qualifying transit system and that the claimed gallons otherwise meet the statutory refund or credit rules.

Common questions

Q: Did the city have to own the buses?
A: No. The county leased them to the city under the interlocal agreement.

Q: What service qualified?
A: Nonexclusive transportation for the general public through fixed routes and demand response.

Q: Could the buses be used for charter service?
A: No. The agreement expressly prohibited charter use.

Q: Was Department licensing required?
A: Yes. The city was entitled to the credit when licensed as a mass transit system.

Q: Can another transit operator rely on this TAA?
A: Not automatically. The advisement says it binds the Department only for the specific interlocal agreement, operational control, public-service, no-charter, and licensing facts described.

Citations and references

• Fla. Stat. § 159.02(19) — definition of mass transportation
• Fla. Stat. § 206.41(4)(a) — fuel tax refund or credit for licensed mass public transportation systems
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 96B5-001

Original ruling text

TAA 96B5001
[[October 1, 1996]]

Re:Technical Assistance Advisement No. 96(B)5-001
<>
Dear:
Your request for advice on whether the XXXX [City] qualifies for a Mass Transit System credit has been given to me
for response.
Facts
An interlocal agreement between the XXX [City] and the XXXX [County] was entered into on December 20, 1994.
The agreement requires that the county lease four transit coaches to the city which will "be used solely for the
purpose of providing public transportation to the general public at large on a non-exclusive basis, and shall be used
solely for fixed-route and demand response modes of services. The transit coaches shall be operated and used
under the sole dominion, control, direction and expense of the City. None of the transit coaches may be chartered or
used in any type or form of charter service. The City shall keep the County informed of any proposed alterations to
the transit services for which the four (4) transit coaches are utilized including but not limited to routing, mode(s) of
operation, hours of service or headways. Any material alteration of the service and any increase in the fare charged
to the public for service shall be subject to a public hearing process prior to implementation."
Law
Section 159.02(19), Florida Statutes, defines "mass transportation" as:
... any system for the transportation of the public by bus, rail or any other means of conveyance serving the general
public and moving over prescribed routes.
Section 206.41(4)(a), Florida Statutes, provides:
(a) Any person who uses motor fuel on which the taxes imposed by paragraph (1),(e), (f), or (g) have been paid for
any system of mass public transportation authorized to operate within any city, town, municipality, county, or transit
authority region in this state, as distinguished from any over-the-road or charter system of public transportation, is
entitled to a refund of such taxes. However, such transit system shall be entitled to take a credit on the monthly diesel
fuel tax return not to exceed the tax imposed under said paragraphs on those gallons which would otherwise be
eligible for refund, when such transit system is licensed as a mass transit system. A public transportation system or
transit system as defined in this paragraph may operate outside its limits when such operation is found necessary to
adequately and efficiently provide mass public transportation services for the city, town, or municipality involved. A

transit system as defined in this paragraph includes demand service that is an integral part of a city, town,
municipality, county, or transit or transportation authority system but does not include independent taxicab or
limousine operations. The terms "city," "county." and "authority" as used in this paragraph include any city, town,
municipality, county or transit or transportation authority organized in this state by virtue of any general or special law
enacted by the Legislature.
Conclusion
We find that, under the terms of the interlocal agreement between the XXX [City] and the XXXX [County], the XXX
[City] is providing a mass transit service as defined in s. 159.02(19), F.S., and is entitled to the credit, under the
provisions of s. 206.41(4)(a), F.S., when licensed as a mass transit system by this Department.
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 confidential information, we request you notify the undersigned in writing within 15 days of any deletions you
wish made to the request or this response.
Sincerely,

Lynwood Taylor
Senior Tax Specialist
Tax Policy & Dispute
Resolution

LNT/lnt
Control No. 25552