Section 45IAC10-3-5. Sales to a public transportation corporation

   (a) Special fuel sold to a public transportation corporation established under IC 36-9-4 is exempt from the special fuel tax so long as the special fuel is placed into the fuel supply tank of a motor vehicle operated by a public transportation corporation for the sole purpose of transporting persons for compensation within the Indiana territory of that corporation.

  (b) A "public transportation corporation" is a municipally owned public transportation system that:

(1) operates buses or other motor vehicles designed to carry more than six (6) passengers, not including the driver; and

(2) operates over designated and definite routes within one (1) municipality and its suburban territory, or within and between two (2) or more municipalities located not more than ten (10) miles apart, and within their suburban territories.

  (c) For purposes of this section, the "suburban territory of a municipality" consists of the areas within one (1) mile outside its corporate boundaries and one (1) additional mile for each fifty thousand (50,000) people in the municipality's population, or major fraction thereof.

  (d) To qualify for this exemption, carriers must embark, transport, and disembark passengers within the Indiana territory of the public transportation corporation. Special fuel sold and delivered into the fuel supply tank of a motor vehicle operated by a public transportation corporation for the purpose of transporting persons over indefinite routes, or over definite and designated routes of which any portion of the routes are outside the corporation's Indiana territory, is subject to tax. (Department of State Revenue; Reg 6-6-2.1-301(4)(010); filed Jan 3, 1983, 2:29 p.m.: 6 IR 296; errata, 6 IR 1250; filed Dec 18, 2015, 3:40 p.m.: 20160113-IR-045140518FRA)