In June of this year, MSBO received a letter from the Michigan Department of Treasury regarding the use of dyed diesel fuel by private companies that have contracted with schools to provide transportation services. The letter states that the Motor Fuel Tax Act (MFTA) only allows the use of dyed diesel, or the opportunity for tax refunds for clear diesel fuel, when buses are owned and operated by a school district. This letter effectively prohibited companies that have contracted with districts to provide transportation services from utilizing dyed diesel, or access to diesel fuel tax refunds for clear diesel.
After further review, Treasury has issued a follow up letter on this issue stating that private companies that have entered into contract with a school district to provide pupil transportation on behalf of the district (regardless of ownership of buses) are allowed to use dyed diesel or are eligible for a refund of the diesel fuel tax when utilizing clear diesel.