Yes, Off-Road Biodiesel is Taxed in Alaska.

December 5, 2008
State Gas Tax Chart

State Gas Tax Chart

SVO and biodiesel are both considered diesel fuel for tax purposes, and although there are some tax-free uses of diesel, off-road driving is not one of them.

But hey, off-road vehicles, heavy equipment, portable generators, and the like get a 6 cent refund on the intial 8 cent Alaska state tax, so you’re only looking at paying two cents a gallon!

Now biodiesel or vegoil as heating fuel (bioheat) is tax free as far as the state is concerned. Heating fuel includes other “domestic purposes” like cooking, etc.

Basically, if fuel is used in an internal combustion engine, you pay Alaska tax on it.  A small-scale exception is a permanently installed generator that “adds to the value of the property.”

In other words, if you’re off the grid and have a generator shed with a big old lister bolted to a concrete pad, you can generate electricity for personal use with your homebrewed biodiesel/vegoil state-tax free.

The emergency generator you pull out of the garage is not a part of the property’s value, and fuel used in that is taxed at the off-road rate.

It’s ridiculous that the state even collects tax on personal use biodiesel and vegoil, but it’s written into law, so only the legislature can change it.  That means you all need to call your state representative and ask for a personal use exemption for biodiesel/vegoil!

Remember: You’ve still got the Federal Tax to deal with, and if you want to sell or distribute biodiesel you’ve got a whole lot of paperwork ahead of you.

Disclamer: Read the statutes or call Jamie Taylor 907-269-6948 at the Motor Fuels Tax Office if you need real tax advice.

Veg On!

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2 Responses to “Yes, Off-Road Biodiesel is Taxed in Alaska.”

  1. Leon Says:

    Just try to pay tax on WVO, Good luck finding someone that actually knows what to do with you.

    • Will Taygan Says:

      I’ve submitted tax for both biodiesel and SVO.

      As far as Alaska is concerned Motor Fuel Tax is on anything burned in an internal combustion engine, doesn’t matter if it’s petroleum based or renewable. As for the Feds, I file as if it’s biodiesel. One line, not a big deal.


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