Section 45IAC10-3-6. Sales to public transit department

   (a) Special fuel sold to a public transit department of a municipality is exempt from the special fuel tax provided that the special fuel is placed into the fuel supply tank of a motor vehicle operated by a public transit department for the sole purpose of transporting persons for compensation within a service area.

  (b) The "service area" of a public transit department of a municipality is no more than five (5) miles outside the corporate limits of the municipality, and no part of which is outside Indiana.

  (c) In order to qualify for this exemption, carriers must embark, transport, and disembark passengers within the service area of the municipality. Special fuel sold and delivered into the fuel supply tank of a motor vehicle operated by a public transit department for the purpose of transporting persons over routes of which any portion of the routes are more than five (5) miles outside the corporate limits of the municipality or outside Indiana, is subject to tax. (Department of State Revenue; Reg 6-6-2.1-301(5)(010); filed Jan 3, 1983, 2:29 p.m.: 6 IR 297; filed Dec 18, 2015, 3:40 p.m.: 20160113-IR-045140518FRA)