(a) Each permittee or licensee is entitled to a credit on the highway user fuel tax equivalent to the tax paid on all gasoline, motor fuel, or alternative fuel, purchased by such permittee or licensee within this state and used in its operations outside Tennessee. Evidence of payment of the tax shall be furnished by the permittee or licensee claiming the credit and such evidence shall be in the form required by, or satisfactory to, the commissioner.

(b) When the amount of the credit to which any permittee or licensee is entitled for any quarter, or any annual reporting period, as the case may be, exceeds the amount of the highway user fuel tax for which the permittee or licensee is liable for the same quarter, or annual reporting period, the excess may be allowed as a credit on the tax for which the permittee or licensee would otherwise be liable for another quarter or annual reporting period. Approved credit carryovers may be applied against a permittee's or licensee's highway user fuel tax liability only if claimed on a report filed for any one (1) of the eight (8) quarters succeeding the quarter in which the excess credit accrued, or in the case of annual filers, on a report filed for any one (1) of the two (2) years succeeding the year in which the excess credit accrued.

(c) Upon application within two (2) years from the end of any quarterly reporting period, or annual reporting period, as the case may be, duly verified and supported by evidence as may be satisfactory to the commissioner, the excess referred to in subsection (b) may be refunded. The refund may be made if it appears that the permittee or licensee has paid to another state, under a lawful requirement of that state, a tax similar in effect to the tax provided on the use or consumption in such state of gasoline, motor fuel, or alternative fuel, purchased in Tennessee. The refund shall not be made at a rate other than the Tennessee rate in effect at the time of purchase.