Charlotte Man fined for using alternative fuel


Meet Charlotte, N.C. guitar teacher Bob Teixeira and his son, Jonah Bechtler-Teixeira. Bob converted his car to run on soy oil, and the state of NC fined him $1000 for avoiding fuel tax. Furthermore, they want an additional $2500 bond for him to continue using his alternative fuel, from this Asheville CT article.
How progressive of the state! Way to go North Carolina!
That should encourage more people to step up and find solutions to our energy needs, huh?

Sometimes you just have to wonder. You think the state is worried about its Billion-plus-per-year payday from fuel taxes?

You betcha, they are.

Photo credit: AP Photo, The Charlotte Observer, Dana Romanoff

Comments

It's kind of his fault

He was supposed to pay the taxes. Anyone who produces fuel, whether it is SVO, WVO, Biodiesel, or Ethanol, must pay their share of the motor fuel tax. As for the bond, the DOR is trying to get that removed for individuals who produce their own alternative fuels.

I pay taxes, you pay taxes, he should have to pay taxes.

The fuel tax is used to build roads.

The idea being that the more fuel you consume, the more you should pay for road upkeep. So, I can see why a person should pay taxes on their fuel...but this does seem extreme.

One man with courage makes a majority.
- Andrew Jackson

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.
-me

From what I understand

the $1,000 fine is standard, and the bond is statutorily mandated. Until the statute is changed, everyone will need to have the bond.

If I'm not mistaken,

the State has granted the biofuels industry (temporary) relief from fuel taxes, is that correct?

yes and no

n/t

If you make me work for it,

you may expose yourself to my "more is better" approach to research:

North Carolina
Biodiesel Production Tax Credit
A biodiesel provider that produces at least 100,000 gallons of biodiesel during the taxable year is allowed a credit equal to the per gallon excise tax the producer paid in accordance with motor fuel excise tax rate. The credit does not apply to tax paid on the diesel fuel portion of the biodiesel blends and the credit may not exceed $500,000. This credit is effective for taxable years beginning on January 1, 2008, and is in effect until January 1, 2010. (Reference Senate Bill 1741, 2006, and North Carolina General Statutes 105 129.16F)

Alternative Fuel Production Tax Credit
A tax credit is available for the processing of biodiesel, 100% ethanol or ethanol/gasoline blends consisting of at least 70% ethanol. The credit is equal to 25% of the cost of constructing and equipping the facility, and facilities must be placed in service before January 1, 2011.

In lieu of the above credit, a taxpayer that constructs and places in service in North Carolina three or more commercial facilities for processing renewable fuel and invests a total amount of at least $400,000,000 in the facilities is allowed a credit equal to 35% of the cost to the taxpayer of constructing and equipping the facilities. In order to claim the credit, the taxpayer must obtain a written determination from the Secretary of Commerce that the taxpayer is expected to invest within a five-year period a total amount of at least $400,000,000 in three or more facilities. Facilities must be placed in service before January 1, 2011.

(Reference Senate Bill 1741, 2006, and North Carolina General Statutes 105-129.16D)

Renewable Energy Property Tax Credit
Taxpayers who construct, purchase, or lease renewable energy property, are eligible for a tax credit equal to 35% of the cost of the property. Renewable energy property includes: equipment that uses renewable biomass resources to produce ethanol, methanol, biodiesel, or methane produced via anaerobic biogas utilizing agricultural and animal waste or garbage; and related devices for converting, conditioning, and storing the liquid fuels and gas produced with biomass equipment. The credit must be taken in five equal installments beginning with the taxable year in which the property is placed in service. A ceiling of $2,500,000 per installation applies to renewable energy property placed in service for any purpose other than residential. Property must be placed in service before January 1, 2011. (Reference North Carolina General Statutes 105-129.15 and 105-129.16A)

Alternative Fuel Refueling Infrastructure Tax Credit
A tax credit is available for qualified refueling facilities that dispense biodiesel, 100% ethanol or ethanol/gasoline blends consisting of at least 70% ethanol. The credit is equal to 15% of the cost to the taxpayer of construction and installation portion of the dispensing facility, including pumps, storage tanks, and related equipment, that is directly and exclusively used for dispensing or storing the fuel. The credit must be taken in three equal annual installments beginning with the taxable year in which the facility is placed in service. Facilities must be placed in service before January 1, 2011. (Reference North Carolina General Statutes 105 129.16D)

Alternative Fuel Vehicle (AFV) Grants
Grants from the Department of Environment and Natural Resources Division of Air Quality are available for the incremental cost of purchasing Original Equipment Manufacturer (OEM) AFVs, vehicle retrofits, implementing idle reduction programs, and constructing or installation of alternative fuel public refueling facilities. More than $500,000 in funding is available.

Alternative Fuel Tax Exemption
The retail sale, use, storage or consumption of alternative fuels is exempt from the state retail sales and use tax. (Reference North Carolina General Statutes 105-164.13)

In light of this information, and working from the assumption this poor guy spent x amount of money to modify his vehicle, how many people think it's okay for the State to squeeze another $3,500 out of this guy?

::sigh:::

In a word, no. I don't think so.

I guess that's five words. I've never been able to do anything in one word! I realize that anyone who drives on the roads should have a part in paying for the roads - but it seems that the penalty this man has been asked to pay is exorbitant. Is it equivalent to what I would pay in taxes on gasoline for a year?

I don't know what you drive,

but my Honda costs me about $40 a week in gas, which is $2,080 a year. How much of that is tax?

My whole point with this stance hearkens back to a comment I made on an earlier thread about my fear of the "powers that be" executing policy decisions in the future that benefit large (or those who want to be large) producers of alternative fuels while discouraging individuals who want to micro-produce their own fuel.

I see that future is already here. :(

I spend about $40 - $50 a week in gas.

Depending on where I have to go for work. So figuring on the top end, that's $2600. I have no idea what taxes are, and what percentage of those taxes actually go to pay for the roads.

I think the guy is getting screwed.

Thanks, Blue South!

It sure makes you wonder why big business is getting the breaks, and the little guy just trying to get by is getting it, um, up the tailpipe.

Because it is all about the 1.3 billion a year

the state gets from fuel taxes.

I would be willing to bet there is not really 1.3 billion a year in construction on our highways.

At least not without "gifts" and such.

right.

And this guy's $3500 is going to build and/or repair a whole lot of highway.

How much other stuff are they going to try to sell us?

A teapot museum, maybe?

:)

Sorry, that was out of line. Artifacts with both a handle and a spout are precious, and deserve to be enshrined.

Oh my heavens....

you have me laughing so hard I'm crying.....

Robin Hayes lied. Nobody died, but thousands of folks lost their jobs.



***************************
Vote Democratic! The ass you save may be your own.

The bond and the fine

The bond is there in case you do not pay your taxes and the $1,000 is a fine. It is standard operating procedure. And to DOR's defense, they are trying to get rid of the bond requirement. But are running into problems with certain members of the progressive wing of the party. I won't mention names, but yes, progs are getting in the way of the bond removal.

Don't be shy.

Go ahead and name names. We can't very well bring pressure on individuals if we don't know who they are.

And while you're at it, maybe you can explain to me why it makes sense to pay N.C. Department of Revenue officials to patrol the streets testing people's gas tanks for "illegal" fuel. How many of these fuel tax enforcement officials are there, and what do their salaries cost the taxpayers every year?

Our legislators don't have the time or resources to properly investigate/verify the legitimacy or legality of tens of millions in taxpayer dollars spent on programs every year, but we can justify sniffing people's gas tanks? Gimme a break.

I don't to name names until I'm 100% certain

And DOR isn't exactly paying people to go around and sniff gas tanks. This guy was advocating at a race to people to switch to SVO, that is how he was caught.

And I don't understand why people are up in arms defending a guy who wasn't paying his taxes. It is tax evasion, pure and simple. Ignorance of the rules and laws is no excuse here.

its just

that the fine seems excessive. If he was given a 300 or 500 dollar fine I dont think anyone would have really bitched. But a fine that is 4 to 6 times above what normal people pay in a year seems a little absurd

Draft Brad Miller-- NC Sen ActBlue

"Keep the Faith"

From my understanding

The $1,000 is the minimum fine for tax evasion. The Bond is standard practice and statutorily mandated right now, if I were to start producing motor fuel tomorrow for my own personal use, I'd have to pay the same bond as this guy. The only difference, I wouldn't get a $1,000 fine for not paying my taxes and not being in compliance with the law.

He is technically in violation of federal law too. It is illegal for an individual to convert their automobile to run off SVO. It's an EPA mandate, but no one has been brought to charged with anything to do with that ever.

ok

that makes more sense.

it still just gives the impression that we are punishing innovation.

Draft Brad Miller-- NC Sen ActBlue

"Keep the Faith"

if for some reason

you quit producing motor fuel, your bond is returned in full.

That's not what I read, jj.

And DOR isn't exactly paying people to go around and sniff gas tanks. This guy was advocating at a race to people to switch to SVO, that is how he was caught.

It appears the DOR went to the race because they knew there would be a whole bunch of RVs there they could check for fuel violations. And this guy had a bumper sticker that read, "Runs on 100% vegetable oil!" or something similar.

I'm up in arms about this because I see a possible bright future for a progressive alternative fuel situation being shaped into another "big oil screws the little guy" scenario, and I'm pissed.

There was some misinformation in that article

There has been a trend lately amongst RV users, to use dyed diesel or kerosene in their diesel engines as a means of getting around paying the highway use tax.

It does give the impression that we are punishing individuals

for being innovative, and giving incentives to corporations. That's what gets me a little inflamed. I understand that the law is the law, and should be obeyed.

I find it disingenuous of lawmakers to give breaks/incentives to corporations who can produce large quantities of the stuff, but individuals who want to do this for their own personal use must put up a bond. Of course, it's returned to them if they stop producing/using the alternative fuel. Is it held in escrow, or is it returned with interest? Does the state earn interest on it?

It's a bad law. It should be challenged. Bet it won't be, though.

Corporations also have to put up a bond

The rate of the bond is dependent on how much is being produced. as a large scale producer, you can end up with a bond up to $500,000.

Yes, I'm sure they do.

But are tax credits available such as those posted by scharrison above available to individuals as well as corporations? It seems to me that those tax credits can somewhat offset the pinch of the bond.

Do you know if the bond is held in escrow, or if the state earns interest on the money?

The Bonds

From looking at the applications the bonds are held in escrow by a financial institution on the behalf of the producer.

And the tax credits

The rate of the bond is dependent on how much is being produced. as a large scale producer, you can end up with a bond up to $500,000.

that come along with that high volume. And the grants to help pay for construction, and (probably) some other incentives I've yet to find.

What about this guy? If he pays his bond, will he get tax incentives? Is he eligible for a grant to help him pay for his little operation? Does he have a lobby working for him?

The tax incentives

A geared towards job creation and broad market penetration.

The basis behind them is to get refueling stations throughout the State to have biodiesel/ethanol pumps.

All the proposed tax incentives sunset around 2012.

But for the time being

they still can offset the bond.

DOR understands that

And that is why they want to get the Bond removed.

That is for individuals who would have a tax liability under $2,000

Which would probably be

just about every individual who drives, except those who commute extreme distances or traveling salespeople. The three of us who've discussed our usage would each have about $300 per year (fuel) tax liability, which is a fraction of the $2,000.

So...let's say I give the state $300 to cover my fuel tax, and they've waived the bond. I spend the money to buy a contraption to make my fuel with, and I refit my car. Let's also say that 100,000 other people in this state do that, while the other folks merely refit their cars and buy at the pump.

Would losing 100,000 customers critically impact the future biofuels industry?

I don't think

100,000 people would do that. The majority of people making their own biofuels are doing it with waste grease and there isn't enough waste grease to go around.

It is not all waste grease or oil

methane from any source would fall under this law.

chicken shit, garbage, worms... whatever

methane

is harder to convert to running your automobile. The bond is strictly limited to motor fuel taxes.

And of the people I know who produce their own biodiesel do it strictly with WVO.

how many people do you know

that are producing their own biodiesel?

I wonder how many are under the radar? Seems like many of the folks who would do this are "off the grid" types who might not stand up and be counted.