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Old 04-14-2011
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smokediver smokediver is offline
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Originally Posted by RAF View Post
Same with having a sign on your truck saying " Powered by bio-diesel or WVO". I would keep it on a need to know basis. Sooner or later, the tax man will come a knocking at your door.
That's kinda my thinking RAF. I'd like to put a sticker on my truck, just for fun, but don't dare.
I even had a local newspaper reporter who wanted to do a story on my "alternative fuel" but I didn't want the taxman finding my name there. I considered letting him do the story if he keeps me anonymous, but that's still a little close.
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Old 04-14-2011
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26 USC Sec 40.

Waist Vegetable Oil is not considered a motor fuel so it is therefore not taxed as a motor fuel by the federal government. The EPA however, has stated that any vehicle using WVO must still pass emission standards. The EPA at this point, is not taking any enforcement action against WVO producers but it has said it might in the future to ensure production, storage, spill and cleanup standards are met.

Several states specifically regulate production, storage, use, to include taxing WVO. If you live in a far left leaning state, you probably are subject to some regulation. Several states specifically have statutes prohibiting the regulation of WVO, and most states have no regulations at all.

Biofuels are considered motor fuel and are therefore taxed by the federal government at the rate of $1 per gallon as long as the manufacturer produces in excess of 10,000 gallons per year. The producer needs to be licensed by the EPA and register with the IRS. The producer is then eligible for a tax credit to offset that production. The tax credit offsets approximately $994 for every $1000 in tax. A producer of biofuel is exempt from the EPA and IRS regulations as long as he produces no more than 400 gallons per quarter and only uses the fuel off-road, for his own consumption. If he barters, sells, or otherwise allows for the use by another, he must be licensed. If a producer makes or sells between the individual consumption and 10,000 gallon limit, he may or may not need to be licensed but needs to register with the IRS, pay the tax and then is eligible for the tax credit.

Many countries including China, Japan, Australia, and some in Europe are adopting exemptions for the production and sale of WVO and SVO, because of their low polluting qualities.

The long and short of it is; find out what the regulations are in your area, check with the IRS and see if you need to register, check with the EPA to see if you need a license or are exempt.

I still have yet to find any regulation or statute that would allow a state or federal agency to do a search without probable cause, in which case they need a warrant. And that includes for failing to pay taxes.
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