Important Notice: Piped Natural Gas Excise Tax Phase-Out for Manufacturers and Farmers
On August 20, 2007, Governor Easley signed into law Senate Bill 3. Among the
provisions of the act is one that phases out the tax on piped natural gas received
by manufacturers for use in connection with the operation of a manufacturing
facility and by farmers for use for any farming purpose other than preparing food, heating dwellings, and other household purposes. Manufacturers are those
businesses classified under industry sectors 31, 32, or 33 of the North American Industrial Classification System (NAICS)*.
Effective for bills issued on or after July 1, 2012, the definition of "manufacturer" is expanded to include entities generating electric power as described in industry sector 22 of NAICS.
The following rates per therm apply to piped natural gas received by a manufacturer or farmer for the purposes stated above for bills issued on or after October 1, 2007 and before July 1, 2008:
| therms | rates per therm |
|---|---|
| Up to 200 | $.032 |
| 201 to 15,000 | .024 |
| 15,001 to 60,000 | .016 |
| 60,001 to 500,000 | .010 |
| Over 500,000 | .002 |
The following rates per therm apply to piped natural gas received by a manufacturer or farmer for the purposes stated above for bills issued on or after July 1, 2008 and before July 1, 2009:
| therms | rates per therm |
|---|---|
| Up to 200 | $.025 |
| 201 to 15,000 | .019 |
| 15,001 to 60,000 | .013 |
| 60,001 to 500,000 | .008 |
| Over 500,000 | .002 |
The following rates per therm apply to piped natural gas received by a
manufacturer or farmer for the purposes stated above for bills issued on or after
July 1, 2009 and before July 1, 2010:
| therms | rates per therm |
|---|---|
| Up to 200 | $.014 |
| 201 to 15,000 | .010 |
| 15,001 to 60,000 | .007 |
| 60,001 to 500,000 | .004 |
| Over 500,000 | .001 |
The excise tax reduced rates are replaced with an exemption from the excise tax
on piped natural gas for manufacturers and farmers for the purposes stated
above for bills issued on or after July 1, 2010.
To qualify for the reduced rate, a farmer or manufacturer must submit to the
provider of the natural gas a copy of a completed Form E595E,
Streamlined Sales and Use Tax Agreement Certificate of Exemption. A manufacturer purchasing piped natural gas for a qualifying purpose is required to enter its sales and use tax registration number on the exemption certificate. A farmer purchasing piped natural gas for a qualifying purpose is required to enter the appropriate exemption number as assigned by the Sales and Use Tax Division of the Department of Revenue. Meter number(s) should also be noted on the form. Meters not primarily associated with gas used in a manufacturing process should not be included.
Questions about this notice can be directed to the Taxpayer Assistance Division
at telephone number 1-877-252-3052 (toll-free) or in writing to the
Taxpayer Assistance Division, North Carolina Department of Revenue P.O. Box 25000,
Raleigh, N.C. 27640-0001.
* Information concerning NAICS classification is available at:
http://www.census.gov/epcd/www/naics.html