The NAFA Fleet Management Association says it has received clarification on two issues relevant to fleet managers in the public service sector: the sale of taxable fuel to state and local governments, and fuel resale to other state and local governments. According to the Internal Revenue Service, sales of fuel from one jurisdiction to another are permissible.
The IRS said it permits state-to-state (including county and municipal governments) sales, with both being tax-exempt, but state or local governments may not sell tax-free fuel to a federal agency.
NAFA says the IRS was responding to a memorandum sent Aug. 17 by its U.S. legislative counsel.
