Understanding fuel costs, taxes, and exemptions is an important part of business planning for school bus contractors. Often there is confusion about what the taxing source, federal or state, and how exemptions work. This article describes the processes for obtaining fuel that excludes the Pennsylvania Motor Fuel Tax or how to seek reimbursement for the state tax for fuel used to transport school students to and from school.
A fuel clause is language in a contract which allows the contractor and the district to share the risk of steep increases or decreases in fuel prices. The fuel clause is typically put into place for diesel fuel and gasoline, however, if your vehicles are using alternative fuels such as propane or electric, you may also want to consider a fuel clause for these fuels. Most fuel clauses address the risk of rising fuel costs. But, recent history has seen both increases and decreases in fuel costs. T...