Motor Fuels Tax Minute, Episode 40: Florida Case

In this week’s episode of Motor Fuels Tax Minute, our hosts fill us in on a recent Florida case.

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Detailed Description of Weaver’s Motor Fuels Tax Minute, Episode 40

00:00:00

Kelly: Welcome to our Motor Fuels Tax Minute, where we talk everything motor fuel tax.

Leanne is going to fill us in on a recent Florida case.

00:00:09

Leanne: Thanks, Kelly. Yeah, this was a case that I just came across, although it is from a couple months ago. It basically states that when a transaction is exempt from the fuel tax in Florida, it is subject to the sales tax. I’m not sure that this is something that everybody knew about, so I thought it was worth discussing.

What actually happened in this case was a taxpayer purchased diesel to use for offroad purposes, and they purchased it at the terminal rack. So, because of the rules for offroad purchases, they paid the fuel tax to their supplier. They then sought a refund of the fuel tax because they used it for offroad purposes. When they got their refund of the fuel tax, the Department of Revenue offset that against sales tax that had not yet been paid because typically when you pay the fuel tax in Florida, the supplier doesn’t also charge the sales tax. It is one or the other. The statute does say where it’s subject to the fuel tax, it’s not subject to the sales tax. So, the taxpayer challenged the Department of Revenue offsetting their refunds, saying, well, the fuel tax was paid and where the fuel tax is paid, there’s no sales tax. This went to the administrative law judge, and they disagreed. They said a refund is the same as an exemption, so whether it’s exempt upfront or whether it’s exempt by way of a refund, the sales tax would be due.

So, something to think about if you’re in Florida and particularly if you’re doing those offroad highway use refunds. You will see that your refund is offset by the amount of the sales tax, or you may simply have to pay the sales tax and then you’ll get the full refund. How they do it may differ from taxpayer to taxpayer, but it’s not going to be exempt from both.

00:02:02

Emilda: That’s an interesting case, Leanne. I think what’s even more interesting is how the two departments work together, the sales tax and the motor fuel.

00:02:12

Leanne: Yeah. When does that ever happen?

00:02:17

Emilda: Right? I think that’s great. There’s no interesting way of escaping tax, right?

We want to thank our listeners for tuning in and this concludes our Motor Fuels Tax Minute.