Was dyed diesel used in citrus-harvesting 'goat' vehicles exempt from Florida fuel and sales taxes?

Subject

Dyed Diesel Used in Citrus-Harvesting Goat Vehicles

Plain-English summary

Dyed diesel sold for use in citrus-harvesting “goats” was exempt from both Florida fuel tax and sales and use tax. In this ruling, a goat was not an animal; it was a self-propelled flatbed farm vehicle that shuttled containers of picked citrus from tree rows to trailers for transport.

The vehicles remained in citrus groves except for limited trips between groves. They were registered as farm implements, operators did not need driver's licenses, and the ruling described them as designed and used principally to transport citrus fruit within groves rather than operate on public roads.

Section 206.874(3)(a) exempted dyed diesel used on a farm for farming purposes. The sales-tax provisions likewise excluded dyed diesel used for agricultural purposes in farm vehicles and equipment. The statutory restriction on public-highway operation did not apply to movement of farm vehicles or equipment between farms.

What this means for you

The exemption depended on both the fuel and the equipment's use. Dyed diesel had to be used for qualifying farm activity in equipment operated principally on the farm, not ordinary highway transportation.

Limited movement between farms was expressly allowed under the language quoted in the ruling. Broader road use or a different vehicle function could change the result.

Common questions

Q: What was a citrus “goat”? A motorized farm vehicle used to carry picked-fruit containers within citrus groves.

Q: Were both Florida fuel tax and sales tax exempt? Yes. The Department's conclusion exempted the described dyed diesel from both Chapter 206 fuel taxes and Chapter 212 sales and use tax.

Q: Did occasional travel between groves disqualify the fuel? No. The agricultural-purpose definition allowed movement of farm vehicles or equipment between farms.

Q: Why did vehicle registration matter? The farm-implement registration supported the conclusion that highway use was incidental and that the goat was agricultural equipment.

Q: Would ordinary on-road diesel use qualify? The ruling did not approve that. Its result depended on specialized farm equipment used principally within citrus groves.

Citations and references

• Fla. Stat. § 206.874(3)(a) — dyed diesel used on a farm for farming purposes
• Fla. Stat. § 212.0501(1)-(3), (5) — diesel use by businesses and the agricultural exception
• Fla. Stat. § 212.08(3), (5)(e) — agricultural vehicles and fuel use
• Fla. Stat. § 320.08(3)(d); Fla. Admin. Code r. 15C-1.002 — goat registration cited in the ruling
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 98B5-001

Original ruling text

TAA 98B5001
SUMMARY

Taxpayer requested information on whether the sale of dyed diesel fuel is exempt from both fuel taxes and Sales and
Use Tax when the fuel is used in "goats" which are used for the harvesting of citrus fruit. Determination is made that
the sale of dyed diesel fuel for such use in exempt from both fuel taxes imposed under Chapter 206, F.S., and Sales

and Use Tax imposed under Chapter 212, F.S.

[[January 14, 1998]]

Re:Technical Assistance Advisement No 98(B)(5)-001
<>

XXX (Hereinafter called "Taxpayer")

Dear :

Your letter of October 14, 1997, requested a Technical Assistance Advisement on the application of the diesel fuel
taxes and sales and use tax to the above referenced matter. This response to your request constitutes a Technical
Assistance Advisement under Chapter 12-11, Florida Administrative Code, and is issued to you under the authority of

s. 213.22, Florida Statutes.

ISSUE

Whether Taxpayer may sell dyed diesel fuel exempt from fuel taxes and sales and use tax to customers for use in

"goats" used for citrus grove harvesting.

FACTS AS PRESENTED

The facts as you have presented them are:

The Taxpayer is a licensed motor fuel wholesaler engaged in the business of, among other things, purchasing diesel
fuel from refiners at the Port Everglades terminal and reselling the diesel fuel for both on-road and off-road use.
Taxpayer purchases both undyed diesel fuel (all federal and state fuel taxes included in the price charged by the
refiner or terminal supplier) and dyed diesel fuel (free of federal and state fuel taxes, except for the state pollution tax)

for resale to the Taxpayer's customers. One of Taxpayer's classes of customers is citrus grove owners/operators.

In their grove operations, Taxpayer's citrus grove customers use self-propelled vehicles called "goats." A goat is
driven between the rows of citrus trees; and containers of picked fruit are loaded onto the flatbed of the goat, either
manually or by a separate piece of equipment mounted on the back of the goat. The goat is then used to transport

the containers of picked fruit and the goat returns to the citrus trees to pick up more fruit. Essentially, the goat

provides a shuttle service to get the picked fruit from the citrus tree area to the trailers, for later transport to market or
citrus processing plants. The goats remain in the citrus groves, except for the limited time when the goats are driven

from one grove to another grove.

Goats are licensed under [Section] Chapter 320.083 [,F.S.,] and Fla. Admin. Code Rule 15C-1.002. The license
category is a type "P," and goat licenses are considered by the local county licensing agency as licenses for farm
implements. Operators of goats are not required to have a Florida driver's license, and no motor vehicle liability

insurance is required for the operation of goats.

As you have indicated in your request, effective July 1, 1996, the Florida fuel tax law was changed generally to pattern
the imposition of state fuel taxes in the same manner as the federal system. One change to the Florida fuel tax law
was the creation of section 206.874, Florida Statutes, which specifies exemptions from Florida fuel tax on diesel fuel

purchased in this state. Specifically, subsection 206.874(3), Florida Statutes provides:

(3) Dyed diesel fuel may be purchased and used only for the following purposes:

(a) Use on a farm for farming purposes....

The statutory section cited above provides that as long as dyed diesel is used on a farm for farming purposes, the fuel
is exempted from fuel taxes imposed by Chapter 206, F.S. For sales and use tax purposes, section 212.0501, F.S.,

provides:

(1) It is declared to be the legislative intent that every person is exercising a taxable privilege who purchases any
diesel fuel as defined in chapter 206 for use by that person in a trade or business.

(2) Each person who purchases diesel fuel for consumption, use, or storage by a trade or business shall register as a
dealer and remit use tax, at the rate of 6 percent, on the total cost price of diesel fuel consumed.

(3) For purposes of this section, “consumption, use, or storage by a trade or business" does not include those uses of
diesel fuel specifically exempt on account of residential or agricultural purposes as defined in s. 212.08, or the
purchase or storage of diesel fuel held for resale....

(5) Diesel fuel upon which the fuel taxes pursuant to chapter 206 have been paid is exempt from the tax imposed by

this chapter...

The provisions of s. 212.0501, F.S., impose a 6 percent sales tax on the use of diesel fuel by a trade or business,
except on dyed diesel fuel which is specifically exempted under the provisions of s. 212.08, F.S., or when fuel taxes
were paid on the purchase of the diesel fuel (undyed diesel). To determine whether dyed diesel fuel is exempt from
sales tax when used in "goats," we look to the provisions of paragraph (e) of subsection 212.08(5), F.S., fora
definition of "agricultural purposes" as the term appears in s. 212.0501(3), F.S. Paragraph (e) of subsection

212.08(5), F.S., defines the term “agricultural purposes” to be the use of fuel:

... in any tractor, vehicle, or other farm equipment which is used exclusively on a farm or for processing farm products
on the farm and no part of which... is used in any vehicle or equipment driven or operated on the public highways of

the state. The restriction does not apply to the movement of farm vehicles or farm equipment between farms.

We agree with your contention that the registration for "goats", required by the Department of Highway Safety and
Motor Vehicles under the provisions of s. 320.08(3)(d), F.S., is a registration which authorizes only the incidental use

of the vehicle on the highways of this state. Agricultural purposes are defined as the use of a goat:

... in the field by a farmer or in the woods for the purpose of harvesting a crop, including naval stores, during such
harvesting operations, and which is not principally operated upon the roads of the state.... A "goat" is a motor vehicle

designed, constructed, and used principally for the transportation of citrus fruit within citrus groves.

Sales tax on the purchase of a goat is imposed at a reduced agricultural sales tax rate of 3 percent on the selling price
of such vehicle under the provisions of subsection 212.08(3), F.S. This reduction in sales tax rate identifies that a
goat is considered, for sales tax purposes, agricultural equipment. Dyed diesel fuel sold or purchased for use in
agricultural equipment on a farm, or for processing agricultural products, is exempt from fuel tax under the provisions

of s. 206.874(3)(a), F.S., and from sales and use tax under the provisions of s. 212.0501(3), F.S.

CONCLUSION

The sale of dyed diesel fuel by Taxpayer to Taxpayer's citrus grove customers for use in "goats" is exempt from both
fuel taxes imposed under the provisions of Chapter 206, F.S., and Sales and Use Tax imposed under the provisions

of Chapter 212, 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 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

Technical Assistance and Dispute Resolution

LNT/It
Con. #:31245