Taxable sales are sales not covered by the exceptions listed in the law. [Sec. 153.104, Sec. 153.203 and 153.3021]. Following is a list of taxable sales.
NOTE: Texas commercial transportation companies providing transportation services for Texas public school districts are exempt.
As previously discussed in Chapter 9, the fuels industry for many decades has generally sold, traded and accounted for fuel corrected to a temperature of 60 degrees Fahrenheit, commonly referred to as a net basis. Fuel at an actual volumetric quantity is referred to as gross gallons. The net gallons of fuel, at temperatures above 60 degrees, will be less than the gross amount; and, the net gallons of fuel, at temperatures below 60 degrees will be greater than the gross amount.
Prior to 1969, the laws made no reference to net or gross gallons and it was generally presumed at least by the Comptroller, that the law meant gross gallons. In about the middle 1960s, it was discovered that some taxpayers were charging and remitting tax on bulk sales of taxable fuel to service stations on a net basis.
Subsequently, through a series of rulings and law changes, it was decided that all taxable gallons were to be reported on gross gallons.
However, beginning September 1, 1981, tax is computed on net gallons when sales are made in single deliveries of 5,000 gallons or more, for resale.
Shortly, after the September 1981 net gallons enactment, representatives of the then Fuels Tax Division, Legal Services Division, Audit Division and Enforcement Division met and developed policies in relation to the net gallon issue which are still applicable. These policies are in the form of questions and answers as follows:
In determining the allowable losses from bulk storage or service station storage, should receipts and disbursements be computed on gross?
If a supplier or a distributor sells taxable at gross in bulk, can he report on net?
No. However, the taxpayer could collect on net and report on gross.
What methods are available to a supplier or a distributor to report service station sales and how would each method be audited?
Regardless of the method a supplier or distributor chooses to report service station and consignment station sales the following tests should be conducted to insure that all taxable sales are being accounted for:
Metered sales for a consecutive twelve (12) month period should be compared with net or gross drops depending on the taxpayer's reporting method. Allowances should be made for tax-free sales, i.e. sales to Texas public school districts, transportation companies providing transportation to Texas public school districts, Texas non-profit electric and telephone cooperatives, or the federal government.
If the total metered sales for the twelve (12) month period are within 2% of the drops (net or gross) then taxable sales are accurately reported. If metered sales for the twelve (12) month period exceed the drops (net or gross), then all of the drops may not have been recorded and/or reported. Before any adjustments are made, verify any differences.
NOTE: Sometimes metered sales amounts are not maintained with the fuels tax records. They may be kept with the sales tax records such as the shift/daily check out sheets.
On the reporting methods previously discussed tax-free sales may be deducted only if the distributor or supplier operates the service stations. Tax must be reported by the distributor on all fuel sold that is on a consigned basis. Tax must be reported by a supplier on all fuel sold that is on a consigned basis except where a written agency relationship exists between the supplier and his consignee and a valid signed statement is obtained. The invoice must be the supplier's.
The only tax-free sales that a distributor (gasoline) service station can have are sales to the federal government, Texas public schools districts and companies providing transportation services for Texas public school districts, and Texas non-profit electric and telephone cooperatives.
Method B and C include an option of using a tax-paid inventory. In order to begin this method, a supplier or a distributor would have to report tax on the ending inventory of the month in which they stopped reporting on sales, or the beginning inventory of the month in which they began using the tax-paid inventory methods. Thereafter, inventories may be omitted in computing the tax.
According to Sec. 153.103(c) and 153.204(c) the tax on the deliveries on consignment sales to users and consumers shall be computed on the basis of actual sales. The rationale used in allowing distributors and suppliers to report on net or gross deliveries to service station storage is that since sales are allowed to non-permitted service stations on a net basis, (if these deliveries qualify under Rule 3.182 and Rule 3.189) then a distributor or supplier should also be allowed to use that same basis.
Tax Code, Sec. 153.103(d) and 153.204(d) provide that if the Comptroller is not satisfied with the amount of tax required to be paid by a distributor or supplier who elects to report on the basis of actual sales the Comptroller may audit based on beginning inventory plus gross gallons delivered, less ending inventory, less an agreed upon loss allowance of up to 2%. Consequently, if a supplier or a distributor was audited, and the reported meter sales or actual sales were not satisfactory, then the auditor would use the previous formula, which would be less than net drops, because net should never be 2% less than gross on a yearly basis.
A non-permitted customer has several service stations and a transport delivery truck with a cargo capacity of 4,700 gallons. He picks up his fuel at a terminal. Can he buy tax-paid at net?
A distributor or a supplier has several service stations and a transport delivery truck with a cargo capacity of 4,700 gallons. He picks up his fuel at a terminal. Can he buy tax-paid at net?
No. However, he could buy tax-free and report his sales from service stations based on the net drops to the service stations if these drops meet the requirements (Rule 3.182).
A distributor or a supplier buys fuel tax-free and puts it in his bulk storage. He then re-delivers it to his service stations with his 4,700-gallon delivery truck. Can he report the tax for these service stations based on net drops to the service stations?
Yes. However, he would have to have the facilities to determine the temperature of the fuel when he loaded his delivery truck from bulk storage. Also, the net drops would have to meet the requirements (Rule 3.182).
A distributor has several service stations and a 4,700-gallon delivery truck. The terminal also has a 4,700-gallon delivery truck. Can the distributor order 8,000 gallons from the terminal and have it delivered tax-paid at net?
A service station orders 6,000 gallons of gasoline. The distributor delivers only 4,500 gallons because that is all the service storage will hold. Is tax due on net or gross?
A service station orders 12,000 gallons of gasoline from a distributor. The distributor has one delivery truck, which holds 2,500 gallons, and it takes him 5 trips to deliver the fuel. Can these 12,000 gallons be billed at net?
A gasoline or diesel jobber has a 9,000-gallon transport. He buys 88,000 gallons tax-paid at net (10 full loads) at the terminal. He sells all of this fuel off the truck, (in single deliveries of less than 5,000 gallons) at gross and collects tax on 90,000 gallons. Is this permissible?
Yes. If the law allows such a situation, the tax on the extra 2,000 gallons that he collects is not considered unjust enrichment.
A distributor has a 9,000-gallon transport. He buys 88,000 gallons tax-paid at net (10 full loads) at the terminal. He sells all of this fuel off of the truck (in single deliveries of less than 5,000 gallons) at gross and collects tax on 90,000 gallons. What is his tax liability, if any?
90,000 taxable sales 88,000 less tax-paid purchases ------ 2,000 adjusted gross taxable gallons 40 less 2% handling allowance ------ 1,960 net taxable gallons
Prior to 1977, audits of distributors and sometimes on suppliers were performed on the basis of beginning inventory plus gross purchases, minus tax-free disbursements, minus ending inventory equals taxable sales. This procedure was basically unfair because distributors and suppliers do have losses. In 1977, in an agreement between the Comptroller and the industry, losses were allowed on fuel delivered out of bulk storage of a distributor or a supplier of up to 2%. No loss was allowed for service stations.
Beginning January 1, 1980, distributors and suppliers who had retail outlets were now allowed to report sales from these outlets on the basis of actual sales, thus automatically allowing losses. However, if the Comptroller is not satisfied the tax may be computed on gross deliveries to that service station. In March 1981, an agreement was made between audit administration and the industry that an allowance of up to 2% will be allowed between metered sales and sales computed on gross deliveries to the service station on a calendar year basis.
Both agreements are still valid, and both agreements specified that the distributors and suppliers had to maintain adequate and proper records.
Since these agreements have been in existence, very few audits have assessed additional tax because the 2% loss allowance was exceeded. In a normal operation where proper control and records are maintained, bulk storage losses or service station losses should not exceed or even approach 2%.
Also, the computations of audits where losses exceed 2% are difficult. These audits require that all receipts and disbursements be converted to gross gallons whether tax-free or tax-paid in order to arrive at an actual volumetric loss. Consequently, most audits involve the assessing of unreported taxable sales or disallowed tax-free sales.
Audits should be performed on the basis of total fuel to account for where records are non-existent, inadequate, or not made available, in which case no losses are allowed.
Verification for proper documentation of tax-free sales should be done on all audits of distributors and suppliers. The flow of tax-free gallons should be traced from the original document to the return. Tax-free sales of gasoline may be made by distributors to:
Tax-free sales of diesel fuel may be made by suppliers to:
NOTE: All sales must be documented by invoices, manifests, contracts, etc.
The fact that tax-free sales may be made from one distributor to another distributor and from one supplier to another supplier or bonded user does not prevent tax-paid sales from being made. For various reasons, a distributor, supplier or bonded user may desire that certain purchases have tax included, which is permissible.
Tax-free sales of fuel may not be delivered into the fuel supply tanks of motor vehicles. The only exception is deliveries into the fuel supply tanks of motor vehicles owned by the U.S. Government, motor vehicles operated by or for Texas public school districts and Texas commercial transportation companies contracted by Texas public school districts.
Tax-free sales by distributors and suppliers to other permit holders (i.e., distributors, suppliers, bonded users and prepaid users) are required to be reported on the "Texas Gasoline or Diesel Fuel Schedule of Sales or Purchases" supplement.
(For further information regarding permits, see the "Permit" section of the Chapter covering the particular tax type: Gasoline - Chapter 2, Diesel Fuel - Chapter 3, Liquefied Gas - Chapter 4).
Tax should be assessed against a distributor or a supplier on tax-free sales to a customer whose permit has been canceled. The permit cancellation date should be determined by the date of the monthly permit holder deletions list; it should not be based on the date that the permit was actually canceled.
EXAMPLE: If a monthly deletions list dated January 9, 2000, indicated that a taxpayer's permit was canceled September 30, 1999, then tax should be assessed against the supplier or distributor on tax-free sales to that customer beginning January 9, 2000, unless there is evidence that notification was received by letter or telephone call on a certain date. In that case tax should be assessed beginning the day after notification was received.
Any credit received for gasoline used in a tax-free manner, including that by distributors, should follow the refund route. The only exceptions to this would be deliveries to aircraft and to the fuel supply tanks of non-highway aircraft servicing vehicles owned by a distributor. These deliveries should be reported on the line for Tax-Free sales to Aviation Fuel Dealers.
A distributor, who has tax-free use such as non-highway vehicles within a refinery yard, farm tractors, etc., is required to:
Where a distributor has appropriated gasoline for their own tax-free use, not reported the tax or claimed a refund, and has adequate records to show this tax-free use, and then additional tax should not be assessed. The proper procedure should be explained to the distributor for future reporting. Audit adjustments should be made for tax-free use not supported by proper documentation.
Tax-free use by suppliers is allowed and may be reported as such but requires proper documentation including gallons and date of use. Fuel used for mowing or cleaning is exempt. Fuel used in city vehicles including dump trucks, garbage trucks, etc., is taxable.
FUEL USED IN AUXILIARY POWER UNITS OR POWER TAKE-OFF EQUIPMENT:
Rule 3.176 covers the use of fuel by power take-off and auxiliary power units mounted on a motor vehicle. If this fuel is measured by an approved metering device, then it may be:
Rule 3.173(8) defines the use of gasoline in power take-off and auxiliary power units that can be claimed for a refund. The use is specific to ready mix concrete trucks and solid waste refuse trucks. A refund of 30% of the total gasoline used in this state by each vehicle can be claimed. Records must be maintained on:
Diesel used in power-take off or auxiliary power units is covered in Rules 3.173 and 3.176. Methods for determining diesel fuel used and subject to refund or credit (Supplier or Bonded User Report) are:
If a separate metering device is not used, then a supplier or bonded user may be allowed a 5% deduction on his report from the taxable gallons used in Texas, or a refund may be claimed by a non-permitted user. THE 5% DEDUCTION IS ALLOWED ONLY FOR DIESEL FUEL AND APPLIES ONLY TO FUEL USED IN TEXAS.
NOTE: The 5% allowance is included on supplier and user reports but not on the Interstate Trucker report. An interstate trucker or IFTA permit holder would be required to file a refund claim for tax-paid Texas fuel USED IN TEXAS as opposed to tax-paid Texas fuel placed in the tank in Texas.
This as in all refund situations is subject to the one year statute of limitations.
In auditing bonded users, the 5% would apply only to highway vehicles for which taxable fuel is reported and not to non-highway vehicles for which incidental highway travel is reported at 1/4 gallon per mile.
A proper mileage and fuel record must be maintained to qualify for the 5% deduction or a refund.
A dump truck or winch truck would also qualify for the 5% allowance. There are probably many situations where fuel used for PTOs and auxiliary equipment amounts to more than 5%. The dump truck or winch truck would be a situation where the actual use is less than 5%.
NOTE: Hydraulic auxiliary equipment operated by electricity would not qualify for the allowance.
Sections 153.111 and 153.214 allow a distributor or supplier to also operate as an interstate trucker (through 06/30/95), dealer, or as an aviation fuel dealer. Consequently a distributor or supplier may make the following tax-free deliveries to an aviation fuel dealer:
Tax-free fuel may not be delivered into the fuel supply tank of an aircraft servicing vehicle used on-the-highway unless it is owned by the U.S. Government.
All fuel delivered into aircraft or aircraft servicing equipment must be covered by a complete record showing:
Tax-free deliveries of gasoline or diesel fuel may be made by the distributor or supplier into the customer's aircraft or his own aircraft. Deliveries into his own aircraft would not be included on Schedule of Sales or Purchases, but would be included in "Tax-free Sales/Uses of the distributor's or supplier's report."
A distributor or supplier may not deliver tax-free fuel into the cargo tank of a person who comes into Texas in his own transport truck and immediately transports the fuel out of Texas. Persons who export gasoline out of Texas may execute an "Assignment of Refund Claims for Tax Paid Gasoline Exported from Texas" (see Rule 3.184). This provision allows the customer to get credit for the gasoline tax without obtaining a distributor permit or filing a refund claim with the Comptroller.
Under this procedure, a distributor should:
When the distributor obtains the proof of export required, the distributor should:
In reality, the distributor who has dealt with the same export customers for years will probably report the sale as a taxable sale and deduct the same amount without ever billing the customer the tax. This method is acceptable if the distributor has obtained the assignment and documentation of proof of export.
A tax-free delivery cannot be made into the cargo tank of a common carrier for export if the common carrier is the purchaser. If the deliveries made to an ocean-going vessel or barge are reported as export sales, then verify whether the destination of the fuel was to a point outside Texas.
NOTE: There are many deliveries made along the coast where the fuel is destined for some other port inside Texas.
An ocean-going vessel or a barge need not be a common or contract carrier in order to qualify for the exemption. In other words, a distributor or supplier may deliver fuel tax free for export into an ocean-going vessel or barge which is owned by the purchaser as long as proper documentation is obtained showing that the destination of the fuel is to a point outside Texas.
Permitted Distributor or Supplier
A permitted distributor or permitted supplier makes an export sale when he sells motor fuel in Texas to a non-Texas purchaser who, when prior to any other sale or use in Texas, sends or transports the motor fuel outside Texas by a common or contract carrier, ocean-going vessel (including ship, tanker or boat) or a barge. In this situation, the buyer actually takes title to the product and arranges the transportation out of Texas.
(For further information on the documentation and reporting requirements for tax-free export sales, refer to Rule 3.187.)
A supplier may make bulk tax-free sales to a diesel tax prepaid user. However, tax-free deliveries may not be made into the fuel supply tank of a prepaid user as in the case of a liquefied gas decal motor vehicle. A prepaid user may purchase tax-free diesel in a 55 gallon drum in the back of his pickup and then fill his fuel supply tank from that drum. A supplier operating a key/card, key/lock diesel outlet would be responsible for taxing deliveries into the fuel supply tank of a prepaid user. However, auditors have found that these deliveries are not taxed since the supplier has no control over the situation. Therefore, if it appears there are tax free deliveries of this type, the auditor should not assess them in an audit.
Tax-free sales of motor fuel may be made to the U.S. Government by distributors, suppliers, jobbers and dealers. Tax-free sales may not be made to contractors for use on government contracts.
(See Rule 3.173 for further information regarding the federal government and the documentation required.)
A tax-free delivery of diesel fuel may be made by a supplier to a person who furnishes a signed statement. Signed statements cannot be accepted for tax-free gasoline sales.
The signed statement from the purchaser relieves the permitted supplier from the burden of proof that the sale of diesel fuel was not taxable to the purchaser and remains in effect unless:
Beginning 10/01/95 a purchaser who operates diesel powered motor vehicles can issue a signed statement for off-road diesel fuel only ("SIGNED STATEMENT FOR PURCHASING TAX-FREE DIESEL FUEL NOT LEGALLY USABLE ON PUBLIC HIGHWAYS.") Invoices must clearly state that the diesel is of the off-road type. The purchaser may purchase tax paid diesel for diesel powered motor vehicles.
NOTE: This is a new form for people who operate diesel powered motor vehicles and also require tax-free diesel for off road used.
Beginning September 1, 2000, a person who wants to issue a signed statement to purchase tax-free dyed diesel fuel for off-highway use must register with the Comptroller for an End User Number (DD number).
A person who uses diesel fuel exclusively for an agricultural purpose in off-highway equipment and wants to issue a signed statement to purchase tax-free dyed or undyed (clear) diesel fuel is required to register with the Comptroller for an Agricultural User Exemption Number (AG number).
NOTE: All signed statements currently on file with a supplier were revoked effective August 31, 2000, but must be maintained for four (4) years.
All signed statement sales are subject to the limitations prescribed in Rules 3.180. The qualifications required of a person who may issue a signed statement are included in this rule and are discussed in the Signed Statement Gallon Limitation section of this manual. The signed statements do not have to be in the exact formats, but should contain all of the elements.
NOTE: Tax should be assessed on all sales to customers where the supplier is unable to obtain a signed statement.
If a supplier does not have sufficient signed statements to cover all tax-free sales, then the supplier is usually allowed sufficient time in which to obtain the signed statements for sales which occurred prior to September 1, 2000. For sales on or after September 1, 2000 the signed statement registration number must be issued on or before any tax-free sales of diesel are made. The purchaser must provide the seller with a copy of the signed statement form issued by the Comptroller, or a fully completed blank form.
Some suppliers deliver tax-paid and tax-free fuel to a signed statement customer. The fuel must be delivered into separate storage.
Separate Operating Division of a Corporation
A separate division exists if the income, assets and expenses attributable to the separate division can be separately determined from the books of account or record. In completing the signed statement and purchasing fuel, the name used on the statement should correspond to the separate or identifiable accounting books; the division should be unique enough to be separated from other divisions.
NOTE: The seller only needs to know that a specific division is purchasing the fuel and that it completed the signed statement.
(Refer to Chapter 2, and Rule 3.180, for a listing of the conditions under which a separate operating division may furnish a signed statement.)
Drilling Rig Fuel
It is common practice for oil and gas well drilling companies to make a contract with an oil company or other entity whereby a well is drilled at a cost of so much per day or per foot and the contract specifies that the oil company furnish all diesel fuel for the drilling rig. The oil company would then be considered the user of the fuel and could issue a signed statement when it purchased the fuel. The diesel fuel furnished by the oil company would be considered a tax-free use by the oil company. It would make no difference if the driller operated diesel trucks. However, the driller could not use any of the drilling fuel in his own trucks.
Signed Statement Gallon Limitations
Suppliers may sell diesel fuel tax free to buyers who furnish the signed statement if:
|Signed Statement Limitations||Through
|DD Registration Numbers||n/a||3,000/10,000||7,400/10,000|
|AG Registration Numbers||n/a||3,000/10,000||7,400/25,000|
|DD Reg. Numbers (Oil & Gas)||n/a||n/a||7,400/25,000|
The following are examples of how that wording should be applied in an audit situation.
|Date||Buyer A||Buyer B|
|July 1, 2001||2,500||2,500|
|July 5, 2001||2,500||2,500|
|July 10, 2001||2,500||2,500|
|July 15, 2001||2,500||2,501|
|July 20, 2001||3,000||500|
The sale to Buyer A on July 20 is not taxable because it is the sale that caused the 10,000 gallon limit to be exceeded and the delivery does not exceed 3,000 gallons.
The sale on July 20 to Buyer B is taxable because the 10,000 gallon limit was exceeded on July 15.
|Date||Buyer A (DD)||Buyer B (AG)||Buyer C (DD)|
|March 2, 2002||7,200||7,200||7,200|
|March 12, 2002||3,000||7,250||7,450|
|March 20, 2002||5,000||7,400||3,000|
|March 25, 2002||0||5,000||2,500|
|March 30, 2002||3,500||3,000||0|
The sales to Buyer A (DD) on March 20 and 30 are taxable because the sale on March 12, 2002 is the sale that caused the 10,000 limit to be exceeded.
The 25,000 gallon limitation was exceeded by Buyer B (AG) on March 25,2002. Therefore, the sale on March 30, 2002 is taxable.
The purchase on March 12, 2002, to Buyer C is disallowed because it exceeded the 7,400 limitation. This load does not count toward the monthly limitation. The sale on March 20, 2002 is tax-free and is the load that caused the limit to be exceeded. The sale on March 25, 2002 is disallowed because the limitation was exceeded with the previous load.
A supplier may make tax-free diesel sales directly into the fuel supply tanks of:
These are "exempt type" sales and they do not require a signed statement. The sales should be reported as Other Tax Free Sales/Uses on the Supplier's report. An invoice must be issued for any "exempt type" sales regardless of quantity.
A supplier may make bulk tax-free sales out of their own service station storage (i.e., sales into 55 gallon drums on the back of a pickup or into some other bulk tank). The supplier is required to obtain a signed statement and issue an invoice.
NOTE: Only suppliers can accept signed statements.
A service station operated by its owner (supplier) may make tax-free deliveries into the fuel supply tanks of off-road equipment (equipment not designed or licensed to operate on public roads) only if such equipment is loaded on a trailer or truck. This type of delivery would be considered the same as a delivery into the supply tank of a reefer. All deliveries into fuel supply tanks of off-road equipment which are driven into the service station are taxable.
Tax should be reported by the supplier on all fuel sold through his consigned service stations. The consignee dealer, in theory, reimburses the supplier for tax on all fuel sales made by the consigned service station. The dealer may make tax-free sales, but only those exempt by the statute, and will have to claim a refund from the state on those sales in order to recover the tax he has paid to the supplier. The consignee dealer cannot make tax-free sales where a signed statement is required, such as into a 55 gallon drum on the back of a pickup. In this case, tax should be charged and the user may claim a refund.
EXCEPTION: If the dealer has the authority to act as an agent for the supplier, the dealer can accept a signed statement on behalf of the supplier. The invoices should be issued in the supplier's name and the agreement should be in writing.
NOTE: The "exempt type" of tax-free sales does not apply to gasoline. In gasoline, the user must file for a refund. Signed statements do not apply to gasoline.
If the history returns show that the taxpayer has inventory, but reports no gains or losses, then this is an indication that one of the items on the return was plugged. Suppliers sometimes plug the "other tax-free sale" items of the current Supplier's report (Form 06-115). The actual amount of tax-free sales should be verified in order to determine the amount of losses or gains included in that figure. If the supplier qualifies for the bulk plant loss allowance, then actual losses up to 2% of total fuel to account for should be allowed.
NOTE: Generally, if a supplier is using plugged figures, the supplier's records may not be adequate to qualify for the loss allowance. All losses from bulk storage would have to be disallowed.
If losses are disallowed, then tax-free sales can be determined by randomly selecting a few test months for actual tax-free sales and then applying a percentage of error to reported tax-free sales.
Tax-free kerosene deliveries may be made into the storage facility of a retail business including a service station from which all deliveries are exclusively for off-highway use. The pump or storage tank must display a legible and conspicuous notice that states "Non Taxable Use Only, for Heating, Cooking, Lighting and Similar Non Highway Use." Several years ago, kerosene could be burned in diesel powered motor vehicles; it may still be blended with diesel and used as fuel. The cost of kerosene has now risen to the point where its use as a motor vehicle fuel, even if tax were avoided, would be prohibitive. Small sales to qualified retailers do not require signed statements, but the records should show why the sale was tax free. Tax-free bulk sales of kerosene may still be made to persons who furnish a signed statement.
Gasoline and diesel fuel may be sold to qualifying transit companies at the special tax rates of $ .19 and $ .195 per gallon respectively through 12/31/2003. Beginning January 1, 2004, qualified transit authorities will pay the full rate ($ .20 for gasoline and diesel). Transit companies that pay the regular tax rate can request a refund for fuel used in qualified vehicles. The refund for gasoline is one cent per gallon and one-half cent per gallon for diesel. Transit companies will have one year from the date of use to file for a refund. To support claims for refunds, transit companies must keep a distribution log showing the gallons of gasoline or diesel removed from their bulk storage.
According to Rule 3.172, the transit company applies for exemption with the Comptroller in the form of an affidavit stating:
If approved, the Comptroller's Office then issues an exemption certificate to the transit company which the company may present to its distributor or supplier for the reduced tax rate. Rule 3.172 is designed to cover Mass Transit Authorities, but it is not limited to them. For example, there are rural and urban transportation districts (Section 458, Transportation Code) that could qualify.
NOTE: The exemption provided under the law and rule applies to fuel used exclusively in transit carrier vehicles; it does not include wreckers, pickups or other service vehicles the company may operate.