N.C. Exempts Veggie-Fueled Cars From Tax

Hot oil fuels a lot of things in North Carolina: Crisply fried just-about-anything - and, recently, a sizzling feud.

The state faced off against drivers who use veggie oil to power their cars, reports CBS News correspondent Joie Chen .

Mark Englander's Charlotte, N.C., shop, Charlotte Energy Solutions, sells a kit that can convert any diesel car to run on used vegetable oil. He gets his free from a local restaurant.

He never imagined his green business would get him in legal trouble -- until the taxman came to the door.

Englander faced the threat of big penalties for driving his veggie-mobile without paying a fuel tax.

The rest of us pay fuel taxes at the pump -- it's rolled into the price per gallon. States and the federal government use the money to pay for roads and bridges.

Stan Bingham estimates he owes just pennies a week in fuel taxes for his soybean bug, which gets great gas mileage.

Still, he says, it's a hassle to figure out.

"I'm not trying to get out of paying the taxes," says Bingham. "I'm happy to pay the taxes. But I don't want to spend 25 hours a month doing paperwork to send them 52 cents."

Bingham is not just a frustrated driver. He's a North Carolina state senator who pushed through a bill to help other owners of vegetable-oil vehicles to stay out of trouble with the revenuers.

On Monday, North Carolina becomes only the fifth state with exemptions for veggie oil, joining Texas, Illinois Rhode Island and Indiana.

Other states are watching closely though, as more drivers make the switch from gas to green energy. That suits Sam Bingham just fine.

Meanwhile, he's back on the prowl in the capitol cafeteria, looking to stock up on that golden chicken - and the oil used to fry it.