(b) All fares collected for public transportation services are exempt from the income taxes imposed by this article if the fares are received by a:

1. (1) public transportation corporation established under IC 36-9-4 ;
2. (2) public transit department established by ordinance under IC 36 ; or
3. (3) lessee common carrier that provides public transportation services under IC 36 .

(c) Fares collected for public transportation services by a private corporation are exempt from income taxes imposed by this article if during the tax year at least eighty percent (80%) of the corporation's total regularly scheduled bus passenger vehicle route miles are within the corporation's designated regional service area. A private corporation's designated regional service area may not be greater than:

1. (1) the county that the private corporation designates as its principal place of business; and

2. (2) all counties contiguous to the county designated by the private corporation as its principal place of business.

   A private corporation may choose a smaller area as its regional service area.

   Formerly: Acts 1975, P.L.58, SEC.3. As amended by P.L.19-1986, SEC.14; P.L.192-2002(ss), SEC.76.