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Government Regulations TAXES Federal (Internal Revenu e Service) The applicable diesel fuel tax rate is 24.4 cents per gallon. This tax is paid by submitting Form 720 Quarterly Federal Excise Tax Return. This also applies to biodiesel fuel which is considered a blended diesel fuel. The person that produces the blended diesel fuel, outside the bulk transfer / terminal system (blender), is liable for the tax which is imposed under IRC section 4081(b) upon sale or removal. Blended diesel fuel is any mixture of diesel fuel, with respect to which tax has been imposed and any other liquid (such as kerosene) which no tax has been imposed. The number of gallons of blended diesel fuel subject to the tax, is the difference between the total number of gallons of blended diesel fuel removed or sold, and the number of gallons of previously taxed diesel fuel used to produce the blended diesel fuel.
http://www.irs.gov and go to publications/forms to Form 720 & Pub 510. NOTE: Taxes vary depending upon the state you live in. California (State Board of Equalization) When used in a diesel-powered vehicle, both biodiesel and straight vegetable oil are taxable under the Diesel Fuel Tax Law. Based on the law (Blender) 60012, Blended diesel fuel 60023, supplier 60033, Blender liability 60055, Levy of tax 60052, and supplier license 60131, biodiesel makers would be "Blenders". As such would need to register as a supplier of diesel fuel and pay $0.18 per gallon on the blending activities. The application for Supplier and/or Ultimate Vendor License is BOE-400-FCO.1 (4-01). Iowa Depending upon what state you live in, you may be responsible for paying any applicable "road use" taxes on the biodiesel you make. You are responsible for contacting your state officials to determine your state's current laws regarding road use tax. EMISSIONS Federal (Environmental Protection Agency) (coming soon) California (Air Resources Board) California air quality regulations are fuel and technology neutral, that is that they do not ban any particular type of vehicle simply because of the fuel it uses. New vehicles are prohibited to be sold or imported to California if they do not meet California tailpipe emission standards. Over the past 35 years that California has regulated the emissions of motor vehicles, manufacturers have chosen several times not to offer diesel vehicles for sale in this state. There are many reasons for this but in general manufacturers must balance the costs of meeting emissions standards against what consumers are willing to pay for a particular type of vehicle. What is happening now is that the minimum emission standard for all vehicles changed in 2003 and due to the type of fuel available for diesels at this time it would be very difficult for these vehicles to meet the minimum required emission standard for 2004. Diesel engines are at a disadvantage over gasoline engines due to their high production of smog forming NOx and toxic PM emissions. Cleaner diesel fuel will allow the use of advanced diesel emission control devices that are not cost effective at this time. We do however anticipate some manufacturers offering diesel products again once cleaner reformulated diesel fuel becomes available statewide. The manufacturer makes the final choice as to certify to CA standards or not since they are responsible that the vehicle meet these standards for the "useful life" of the vehicle. I don't want to misrepresent that this would be an easy standard to meet for the 2004 MY, it is really not possible to do at this time for the price point of most light duty diesel vehicles. With a change to a fuel more like that used in Europe compliance with the standard becomes more realistic. As for existing vehicles, California law only applies to CA residents who acquire NEW vehicles. New is defined as vehicles obtained with less than 7,500 miles. People moving into the state with vehicles registered first in their previous state, or CA residents buying used (over 7500 miles) vehicles only have to worry about getting a US EPA certified vehicle. CA registration of a "grey market" or non-USA diesel would be prohibitively expensive if not impossible. While CA residents cannot buy a new 2004 light duty at this time, CA residents can continue to buy used diesel vehicles as long as are EPA certified and have over 7500 miles at the time they are obtained. There is no smog check program for diesel vehicles at this time however they may be included if CA changes to an OBD based system. At http://www.arb.ca.gov/fuels/diesel/altdiesel/altdiesel.htm you will find links to testing presentations on alternative diesel fuels and test procedures. Verification is a process whereby alternative diesel fuel fuel can qualify for use as part of a retrofit system to existing heavy duty diesel engines. As part of the diesel risk reduction program CA is requiring the retrofit of a wide range of heavy duty vehicles to reduce their emissions. This process is not for upgrading noncompliance engines, rather it is to make in-use compliant engines cleaner. The best way to look at these 2004 standards are that they are the minimums for all new vehicles sold in CA. The vehicle must start with its emissions at this point and if cleaner fuels or technologies are applied then the environment benefits. The CA system has succeeded in driving the market for cleaner vehicles by being firm in requirements that if manufacturers cannot reach certain emissions targets then they loose access to our market. From the presentations on our site you will see that biodiesel does provide emissions reductions to some pollutants, but not in the area of NOx. Vehicles that do not meet these standards, whether gasoline or diesel, cannot be sold new in CA. For further assistance contact (800) 242-4450.
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