Laws, Regulations and Annotations


Business Taxes Law Guide—Revision 2024

Use Fuel Tax Annotations

Exempt Uses of Fuel in Motor Vehicle—Regulation 1316

Construction Area. The following are examples of when the operation of a motor vehicle in a construction area would be considered "off the highway" for purposes of the use fuel tax exemption:

1. The road is completely closed.

2. When half the road is closed and it is necessary to detour the traffic to the other side of the road. The use of fuel in the construction equipment on the portion of highway closed to public travel would be considered used "off the highway".

3. When a detour is constructed around the area under construction so that no traffic can pass through the construction zone. 6/30/72.

Off-Highway Idling. Tax does not apply to fuel used while the vehicle is idling stationary off the highway; including for purposes of loading and unloading or used as a stationary sleeping quarter. 1/24/90.

Passenger Stage Used to Interline. The exemption provided by Section 8655 of the Revenue and Taxation Code for passenger stage corporations under Subsection (b) (2) must be in connection with the operations of vehicles used exclusively within urban or suburban areas as defined in Section 9651.5 of the Revenue and Taxation Code.

When a single vehicle is used to perform a through service by two interlining common carriers, operation by one of the carriers in an urban or suburban area cannot be divorced from the through trip in order to qualify for the exemption on that Section of the whole operation. 11/18/70.

Power Take-Off Equipment. The exemption from use fuel tax for allowable fuel used in operating power take-off equipment, such as a compaction unit on a garbage truck, does not apply to fuel used while the truck is idling, notwithstanding that the power take-off unit may be engaged when the truck comes to a stop at a loading point. Only that fuel which is actually used in the operation of the compaction unit may be excluded from the tax. 10/16/62; 6/05/63.

Sub-Haulers on Forest Service Roads. A sub-hauler of logs contributed to the maintenance of forest service roads by accepting a reduced per unit rate for hauling in accordance with the accepted and established practices in the industry. The sub-hauler, therefore, has met the requirements for exemption under Section 8653.1 of the Use Fuel Tax Law. 3/31/71.