If you make and use your own biodiesel, do you have to pay any tax on it?

Question

I live in NY, but I'd be interested in the laws regarding any state.

Answer 1

No you don't, the only time you would have to pay taxes on it is if you bought the bio-diesel from someone else, over sales tax on the oil if you buy it, instead of getting it from a fast food restaurant.

Answer 2

No. If your materials haven't entered the stream of commerce, it can't even be regulated at the federal level, let alone taxed. The government tried this during Prohibition in the 1920's & 30's. They failed miserably then, and would fail miserably now if they tried to tax you for what you do at home.

Answer 3

After 400 gals. a year. state laws might be different.

Answer 4

In most places yes, from what I hear the paperwork can be a bit of a pain.

Those who have electric cars often have to pay extra on their registration to cover them not paying fuel taxes (which go towards maintaining the roads, or at least are meant to).

Quite a few people who made their own biodiesel have ended up finding out the hard way.  Enforcement is usually only going to happen if a lot of people are doing it (if only a few make biodiesel the loss of income isn't significant) but they can tell which cars are burning biodiesel at which point they can then check to see if you've paid tax on that fuel.

Much of the advantage of home made biodiesel is lower cost because it doesn't involve paying fuel taxes, once you have to pay them you might find it cheaper to use diesel from the pump.

You should also be careful of those who claim it's illegal for government to tax something, claims like that usually don't go down very well in court (the courts have heard it all the before many times and it never works).

Answer 5

I don't think you would because you are not buying anything. You may have to get a permit (I know you do with ethanol) and pay a small fine. In many states, you may qualify for tax incentives, so you may pay less taxes.

Answer 6

yes you must pay taxes on any fuel you use when driving on the roads in this country. there are federal and state, and in some places local, taxes that must be paid. it is NOT a fuel tax as many assume, it is a road tax. this is one reason why aviation fuel cant be used in motor vehicles as the road taxes are not paid.

Answer 7

Yes Federal Gov't Code 26234.1(b)

The tax is $3.23 per gallon

If in California an additional $1.00 per gallon tax. See govt code CA12323.1(u)

Does not make sense. But what do you do?

Answer 8

no you made it it yours to use as you choose

Answer 9

I don't see why. Tax is based on the sale of the product. If your not selling or buying why would it be taxed? How would the government state, local or fed. know how much you were making and how much you were using?