State Tax Day - Current, S.3, California—Motor Fuel Tax: Counties May Qualify as an Exempt Bus Operator, (Dec 4, 2025)

Beginning January 1, 2026, counties that own and operate a local transit system may register with the California Department of Tax and Fee Administration (CDTFA) as an exempt bus operator and pay a specified rate for each gallon or unit of fuel used in an exempt bus operation. An "exempt bus operator" includes any person who owns, operates, or controls an exempt bus operation, like a local transit district system. A qualified bus operation is exempt from paying the diesel and use fuel taxes and is instead required to pay $0.01 for each gallon of fuel used in an exempt bus operation.

Special Notice L-1008, California Department of Tax and Fee Administration, November 2025