// split out taxonomy terms by vocabulary
function bowwowtheme_liquid_print_terms($nid) {
     $vocabularies = taxonomy_get_vocabularies();
     $output = '<ul>';
     foreach($vocabularies as $vocabulary) {
       if ($vocabularies) {
         $terms = taxonomy_node_get_terms_by_vocabulary($nid, $vocabulary->vid);
         if ($terms) {
           $links = array();
           $output .= '<li>' . $vocabulary->name . ': ';
           foreach ($terms as $term) {
             $links[] = l($term->name, taxonomy_term_path($term), array('rel' => 'tag', 'title' => strip_tags($term->description)));
           }
           $output .= implode(', ', $links);
           $output .= '</li>';
         }
       }
     }
     $output .= '</ul>';
     return $output;
}

//what I want to use as part of the code but I need to have the $vocabularies = taxonomy_get_vocabularies();
// split out taxonomy terms by parent
function bowwowtheme_liquid_print_terms($nid) {
  $terms = taxonomy_node_get_terms($nid);
  $links = array();
  $processed = array();
  if($terms){
    foreach($terms as $term){
      $parents = taxonomy_get_parents_all($term->tid);
      foreach($parents as $parent){
        if(!in_array($parent->tid, $processed)){
          $links[] = l($parent->name, taxonomy_term_path($parent), array('rel' => 'tag', 'title' => strip_tags($parent->description)));
          $processed[] = $parent->tid;
        }
      }
    }
    $output = theme('item_list', $links);
    return $output;
  }
}