Certain sales to United States tax-exempt; rules and regulations.

(1) Every terminal supplier or importer of motor fuels shall be exempt from the payment of all excise taxes upon motor fuels sold by such person in the state to the United States or its departments or agencies when the motor fuel is sold and delivered by the terminal supplier or importer in bulk lots of not less than 500 gallons in each delivery to and for the exclusive use by the United States or its departments or agencies.

(2) Every wholesaler of motor fuels who has purchased such fuel tax-exempt from a terminal supplier or importer shall be exempt from the payment of all excise taxes upon motor fuels sold by such licensee in the state to the United States or its departments or agencies when the motor fuel is sold and delivered by such licensee in bulk lots of not less than 500 gallons in each delivery to and for the exclusive use by the United States or its departments or agencies.

(3) Every wholesaler of motor fuels who has purchased such fuel tax paid shall be entitled to a monthly refund of all excise taxes paid upon motor fuels in the state to the United States or its departments or agencies when the motor fuel is sold and delivered by such licensee in bulk lots of not less than 500 gallons in each delivery to and for the exclusive use by the United States or its departments or agencies.

(4) Wholesalers may, instead of filing a refund request, take credit for taxes paid on such sales to the United States Government against tax due on monthly returns.

(5) Terminal suppliers, importers, and wholesalers are not exempt from the tax levied under this part on motor fuel sold or delivered to post exchanges located on United States military reservations.

(6) All purchases of motor fuel by the United States or its departments or agencies when sold through or by post exchanges located on United States military reservations are subject to the tax levied under this part.

(7) The term “exclusive use by the United States or its departments or agencies” shall be construed to mean the consuming by the United States or its departments or agencies of the motor fuel in equipment, devices, or motors owned and operated by the United States or its departments or agencies and operated by contract flying schools training cadet aviators for the United States Air Force under contract whereby the United States reimburses the contract flying school for the motor fuel so used.

(8) The term “exclusive use by the United States or its departments or agencies” shall be further construed to exclude specifically the use of motor fuel by any person, whether operating under contract with the United States or its departments or agencies or not, the original purchase by whom from a terminal supplier, importer, or wholesaler of motor fuel in this state would have rendered such terminal supplier, importer, or wholesaler liable for the payment of excise taxes upon such motor fuel under the laws of the state.

(9) The above definitions of the term “exclusive use by the United States or its departments or agencies,” shall not be construed to be the sole meaning intended by the use of such term in this section, but such term shall be given its ordinary and usual meaning in all instances not specifically mentioned herein, and the enumeration of the above definitions shall be construed as an extension of the ordinary and usual meaning of the term “exclusive use.”

(10) The department shall promulgate such rules and regulations and prescribe such forms as shall be necessary to effectuate and enforce the purpose of this section.

(11) If any subsection, provision, or clause of this section is declared to be invalid or unconstitutional and such invalidity or unconstitutionality shall have the effect of defeating or striking down the attempted exemption, it shall not affect the operation or validity of other statutes of the state providing for the taxation of every gallon of motor fuel sold in the state, it being hereby declared to be the legislative intent to grant exemption from taxation under conditions set forth in subsection (1) only in the event and to such extent that such exemption is lawful and constitutional; and it is further declared to be the legislative intent that if any subsection, provision or clause of this section is declared to be invalid or unconstitutional and such declaration shall have the effect of defeating or striking down the attempted exemption, the terminal supplier, importer, or wholesaler of motor fuel shall pay each and every excise tax levied upon every gallon of motor fuel sold in the state.