I believe there is a federal law for bio or home made diesel. it can only be for personal use and cant exceed X amount of gallons per X time frame

 

I found this explanation of taxes on a biodiesel website. It is dated 2005, so things could have changed since then.
Here is a link to the site.

TAXES & REGULATIONS
Biodiesel, if used as an on-road fuel in a vehicle, may be subject to road taxes. The taxation laws are changing all the time so check with your local tax consultant to identify which taxes biodiesel may be subject to. Currently (April 2005), the first 400 gallons of homemade biodiesel is exempt from Federal excise taxes. Anything over 400 gallons is subject to the normal tax rate. You will need to check your State Tax Code for exemptions on State Excise Taxes.