The tax man is coming after some people whose vehicles run on alternative fuels such as vegetable oil. The reason: These scofflaws are not paying fuel taxes. A musician and guitar instructor in Charlotte, North Carolina was fined a $1,000 earlier this year for not paying motor fuel taxes, according to the June 9, 2007 Charlotte Observer article, “A Price to Pay for Alternative Fuels.” The Sept. 29 CBS Evening News ran “Fuel Tax For Veggie Oil?” on “garden gas” users getting a visit from the IRS.

The amount of money raised through fuel taxes will decline as vehicles get better mileage, which will likely reduce funding for road construction and maintenance. This revenue trend is likely to continue as more people convert to alternative fuels like vegetable oil or bio-diesel, which can be made relatively easily at home. These trends underscore why we should convert to toll roads with variable pricing, or similar forms of revenue generation, which connect a vehicle with the time of driving and distance covered.