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times and locations of passengers’ pickups and dropoffs. The
drivers of the paratransit vehicles were not required to follow
any particular route in servicing a run.
For the 1998 and 1999 taxable years, petitioner Medical
Transportation Management Corp. (MTMC) claimed income tax credits
of $58,673 and $62,000, respectively, for excise taxes it paid on
gasoline. For the same taxable years, petitioner Zuni
Transportation, Inc. (Zuni), claimed income tax credits of
$32,758 and $21,852, respectively. On March 25, 2004, respondent
timely mailed separate notices of deficiency denying petitioners
the entire gasoline credit amount, and provided the following
identical explanation:
It is determined that you do not meet the requirements
for the fuel credit for gasoline under section 6421(a)
of the Internal Revenue Code because you did not
operate qualified buses on scheduled or fixed routes,
and the buses were not available to the general public.
Petitioners filed separate petitions with this Court seeking
a redetermination. In their respective petitions, petitioners
asserted that they met all of the requirements set forth in
section 6421(b) and therefore were entitled to the income tax
credit under section 34(a).
Discussion
I. Background on Section 34 Credit
Section 34 provides a credit against tax for the amount of
excise taxes included in the price of gasoline to the ultimate
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