State or Local Government A credit or refund may be allowed for the excise tax on fuel usedby a state or local government. The fuel must be purchased by the state or local government for itsexclusive use. A state or local government is any state, any politicalsubdivision thereof, or the District of Columbia. An Indiantribal government is treated as a state only if the fuel is usedin an activity that involves the exercise of an essential tribalgovernment function. The use of gasoline, diesel fuel, and kerosene bythe American Red Cross is considered to be the use of these fuels by astate.