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| Tax man calls on local eco-traveler By Lewis Rutherfurd--[ lewis@hmbreview.com ] Published/Last Modified on Wednesday, October 17, 2007 3:52 PM PDT David Eck of Half Moon Bay was driving around local roads in a vegetable oil-powered Hummer this spring. It attracted plenty of attention and newspapers and television outlets picked up the story. Pretty soon the state Board of Equalization picked up the scent as well. Now Eck has to pay state taxes, according to published reports. In California, there is an 18-cent tax on each gallon of fuel that is due when the stuff hits the tank. And that applies to users of alternative fuels as well, said Casey Wells, a spokesman for the state Board of Equalization. Wells declined to comment on the policy and directed inquiries to board publications. "You drive on the roads, you got to pay for them. That's the short answer," said Wesley Caddell, co-owner of the People's Fuel Cooperative in San Francisco. The cooperative is a licensed biodiesel distributor, and Caddell shed some light on the not-so-underground world of alternative fuels in the state. "In the state of California, biodiesel is considered an alternative, experimental fuel and you have to operate under a variance system," Caddell said. "That's how they keep track of all users." The state monitors and taxes the usage at the standard diesel rate of 18 cents a gallon. Biodiesel users have to group into de facto fleets for tracking purposes. And those who want to make the stuff by blending vegetable oils or animal fats with an alcohol, such as methanol or ethanol, must register as diesel fuel suppliers even if just for personal use, according to state documents. But the practice may be headed for the big time in the near future. Caddell said the city of San Francisco is announcing a Bio-Fuel Recycling Program in early November. Instead of paying millions to clear clogged storm drains of restaurant waste, the city will offer free restaurant collection and public drop-off points for grease and oils, he added. Administrators will then filter and process the oil into useable fuel to power an ever-expanding city fleet of biodiesel vehicles, he added. The People's Fuel Cooperative will begin offering fully taxed and legal vegetable oil fuel for public sale next month, Caddell said, in part to solve some of the problems eco-entrepreneurs like Eck have encountered. "Biodiesel and vegetable oil are two separate things," said Caddell, who noted that even users of straight vegetable oil are on the hook. "Any user is supposed to, under state excise rules, report their use and pay that 18 cent tax. It is a law. "Now they don't really have people going around checking, but they're cracking down," he said. "Seeing as that's a problem, we're going to offer the fuel with the tax already legally built in." Eck, who owns a thriving auto repair business in Half Moon Bay and has converted several vehicles to run on vegetable oil, said through representatives that he was just too busy to comment for this story. For more information on local alternative fuels, go to http://bayareabiofuel.com/ or http://peoplesfuel.org/ To learn more about fuel taxes, visit http://www.boe.ca.gov/pdf/pub96.pdf |