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Survey: Taxing Veggie Oil

by Lloyd Alter, Toronto on 06.13.07
Interact (surveys)

bob.jpgIf you drive a car, I'll tax the street; If you try to sit, I'll tax your seat. If you get too cold I'll tax the heat; If you take a walk, I'll tax your feet. So said the Beatles and they had a point. Fuel taxes are a big source of revenue and the taxman doesn't like to lose them; John noted this in Illinois; Now the taxman is after biofuel drivers in North Carolina. Inspectors at a speedway were checking RV's for illegal fuel (diesel is really just fuel oil with purple dye added to prove that the road tax has been paid) and noticed the sticker "Powered by 100% vegetable oil." on Bob Teixeira's 1981 Mercedes. They slapped him with a thousand dollar fine, the feds are fining him too, and he needs to spend $2500 to get a permit to keep driving.

A State Senator says "If somebody was going to go to this much trouble to drive around in a car that uses soybean oil, they ought to be exempt from state taxes" but another official differs-"With the high cost of fuel right now, the department does recognize that a lot of people are looking for relief," said Reggie Little, assistant director of the motor fuel taxes division. "We're not here to hurt the small guy, we're just trying to make sure that the playing field is level." ::Charlotte Observer

It is a conundrum; we want to promote alternative fuels, but the taxman has spent years chasing untaxed fuels, is soybean oil any different?





Comments (15)

Fuel distributors pay their collected road tax levies to state tax offices and no doubt have phone or even personal relationships with staffers in those various tax offices. Pretty easy to start a whisper advocacy campaign where petro fuel distributors are encouraged to gripe about a few people stealing tax revenues from the state treasury, leading to a "crack down" with no policy say by elected officials. Soy and rapeseed farmers, for example, would have the opposite point of view, without doubt, were the issue brought to the light of day. These kind of choices over what to give a tax exemption for get made all the time: to not tax goods sold over the internet or give a rebate for buying a hybrid car are common examples. Its a matter of whether society wants to enforce a petroleum addiction only or encourage alternative fuel production and distribution schemes.

Bottom line: give the issue a public airing via elected officials.

jump to top JL says:

Once an alternative becomes the main fuel source, then it can be taxed. As it stands, we need any incentive we can get.

Electric cars might be a gray area, because it will be hard to determine how much is for regular home stuff, and should be taxed the regular way, and how much is automotive, which will be taxed to fix the roads.

jump to top Tim says:

I can't really answer this poll. I have no problem with large-scale alternative fuels being taxed, but if someone is going out of his/her way to collect and filter veggie oil, or build that mythical water-powered car, there shouldn't be an additional tax burden.

jump to top Chris says:

This is unbelievably absurd, seriously if this is the way lawmakers feel about the way the levee their taxes then why not tax people more based on the economy of their car, the Toyota Pruis' have to pay higher taxes or be fined as they are not paying road taxes anywhere near what are paid by all the SUV owners. Seriously somebody goes out of their way to do something to help the environment and this is how the government treats them. This speaks volumes about how the current government feels about taking care of our environment. I would go on but this outrage upsets me so much it leaves me nearly speechless and I would just be ranting...

jump to top Dalton C says:

I am tempted to give Reggie Little a call at his office at (919) 733-8382.

Contact info for the entire department can be found at:
http://www.dornc.com/aboutus/department.html

jump to top Anonymous says:

While I do think at some point alternatives may need to be taxed I don't know why they government decided to turn it into a witch hunt instead of working with people. I don't think these people should have to pay anything until new and appropriate legislation is passed. I can't wait to see how this gets handled with electric cars. Will I have to pay a fuel tax on the solar panels themself or the power they provide to my car??

jump to top adam says:

I have to take the side of the authorities on this one. The licensing and regulation of vehicles serves a purpose. Unfortunately, it's not just about somebody reducing their emissions and using an alternative fuel. It's about people assuming that they can make alternations to licensed and regulated products (vehicles), unilaterally. How can we know for sure, if we allow individuals to do this, that they've actually done it correctly and that the good that comes from their alterations outweighs the bad? Are there cars less safe after alteration? Are they fire-traps? Again, if nobody approves of the alternations how in the world can we know?

We need to fight FOR regulations. Not fight against the authorities who, in addition to fining unregulated veggie-mobiles, also ensure that other people do not remove their mufflers, put spikes on their bumbers or alter their vehicles to run on house paint.

jump to top Jason Miles says:

I couldn't answer the poll. I feel that if fuel is homemade then it should be excused from taxes, just like homebrew beer is excused from alcohol tax. However if an industry is making extensive use of the roadways to produce and deliver their fuel then they are merely contributing to the infrastructure which they and we use.

jump to top Doug [TypeKey Profile Page] says:

That's just stupid. Basically they are fining him because they guessed wrong on how to apply direct taxation to what it is used for. Once-upon-a-time there was a direct relationship between fuel and what fuel taxes are used for. With new ways comes the requirement to rethink those taxes. They should just remove all fuel taxes and retax those fuels based on the expense those fuels burden society with, and then determine a better way to tax for things like roads. Perhaps tires...

jump to top Kearns [TypeKey Profile Page] says:

I have one question/problem.I make my own fuel additive.The gas i run is cut.My moter cycle loves it.50 percent booze i make in my still (not drinkable not that kind).The other half is all gas.Why should i have to pay more taxes?We pay taxes on tires/gasoline/diesel/property and so many others.

What is next?A tax on walking !!

jump to top Hunter says:

The veggie oil was already taxed once: when it was sold as veggie oil.

This is equivalent to the government trying to tax someone for using garbage. Suppose I leave a coffee table by the curb, and you pick it up. Can the government tax your reuse of it? Because the answer is so clear, that should end the debate.

I honestly believe this was orchestrated by a group like Burston Marsteller (because it's been ubiquitously reported on the 'net) in order to create fear in the minds of people who might otherwise make DIY fuel. It's a scare tactic, and nothing else.

jump to top stevejust says:

The lack of taxes, registration, and general red tape is one of the many things I love about commuting by bicycle. Thanks for the roads, motorists! Now make me some more bike lanes!

jump to top Peter says:

I've had people in cars almost run me off the road on my bike, and say things like I don't pay road tax. I don't think all the monies for roads come from road tax anyways. As high as our taxes on fuel are up here in Canada, I doubt they would cover the costs of building all the roads. Weren't the laws made so people wouldn't use fuel oil? If the government can't provide bio-fuels, then I don't think they should be able to fine people.

jump to top Derek says:

Silly question. of course alternatives should be taxed. I'll not pay for you to drive and the roads need repair no matter what rolls over them. I'll gladly pay for ethanol and I do not expect any one else to pay my way trough subsidies.

I use alternative fuels because I want to, it's good for America, if you want to fill up with french fry oil, then ok, that is good for America too, but please, pay your way too.

(And pay for your own bike lanes.)

jump to top Larry says:

This is breathtakingly ludicrous. Mr. Teixeira deserves a purple heart for dealing with this bureaucracy. The feds are fining him too? Is it too hard for these robo-crats to find out and understand that the federal tax on vegetable oil for fuel is negative? The biodiesel which the US government from the President on down have been beating the drums for us to use is tweaked vegetable oil, and receives a subsidy which dwarfs the combined taxes, and for a reason. Mr. Teixeira should have been given a thanks for forfeiting that negative tax; now he deserves an apology.

If you're going to make a technicalities game out of it, soybean oil may be called oil but it is not a hydrocarbon. Among its differences from petroleum, vegetable oil is much safer. It is not the product the lawmakers were referring to when they wrote the tax laws. They need to address it again before anyone makes such an irrational extension. It's not a free country unless, barring legislation, citizens are free to use their judgment on something like this without being bushwhacked with fearful fines as if they were cheats.

The tax was designed in part because diesel consumption and road use are somewhat correlated, though there is no attempt to extend that to extremes and tax efficiency. The fuel oil ban was an exigency because you would have created a massive problem trying to split the petroleum tax between two applications. This does not apply to vegetable oil. It is not generally a cheaper product unless you're recycling waste, and it is in limited supply. The likely motivations for use are conscientious and patriotic, and pushing the government to act on what it says it wants. This is petroleum displacement, not petroleum misapplication, and fits more rationally in the category with the non-taxed high-mpg or electric car options.

If North Carolina did pass a law to tax vegetable oil as fuel, forcing people to buy the federally-subsidized biodiesel version, that would be the equivalent, to the extent it matters, of siphoning money out of the federal treasury. Fortunately the feds have ways of dealing with states that try that (provided they're serving the people and not the petroleum machine).

If this kind of attack is allowed to stand, then it would have a chilling effect on the otherwise irrepressible grass roots initiators of biofuel use. You'd be jeopardized driving across the country with a sticker that tells people about your initiative and your counterexample challenge to our psychological dependence on oil. The big boys can get controls tightened behind the scenes, making biodiesel too hard to find etc. This is the dream scenario of the sponsors of Al Qaida.

It's like the tax collectors have internalized that the petroleum monopoly is a hustle but don't you argue with this as long as they're in on it.

If these bureaucrats can't apply a tax rationally and in the public interest, that's Exhibit A why we need to scrap most of these complicated systems and just go to a simple carbon tax and/or petroleum tax (and perhaps a small separate road-use tax metered electronically). It's time to move to heat pumps etc. anyway, as external costs like blood are dominating petroleum, so fuel oil should be taxed the same; these inspectors can find another job. Maybe that's why they have contempt for biofuel.


jump to top P Schager says:

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