Piped Natural Gas

What Sales and Use Tax is Due?

Gross receipts derived from sales of piped natural gas are subject to the 7.00% combined general rate of sales and use tax.

Gross Receipts Subject to Tax

The gross receipts derived from the sale of piped natural gas is the total amount or consideration for which piped natural gas is sold.  The gross receipts must be valued in money, whether paid in money or otherwise.

Charges or Fees that are Part of Gross Receipts Subject to Tax

The gross receipts include any charges for services that go into the production or delivery of the piped natural gas including any amount for which credit is given to the purchaser by the seller without any deduction on account of the cost of the piped natural gas sold, the cost of materials used, labor or service costs, interest charged, losses, or any other expenses whatsoever. All charges for items provided in the production and delivery of piped natural gas to customers are part of the gross receipts, notwithstanding that some charges may be billed separately from the charge for the metered service. 

Examples of charges included in the gross receipts subject to tax:

  • Construction charges billed to new customers for extending facilities to these customers or a contribution in aid of construction charges.
  • Charges made to customers when the company first supplies piped natural gas under any applicable rate schedule.
  • Charges to the customer, whether or not the customer uses metered service.
  • Charges for reconnecting service to customers after service has been terminated for nonpayment.
  • Any separately stated charges for repair, maintenance, and installation services.

Charges or Fees that are Not Part of Gross Receipts Subject to Tax

The following are charges or fees that are not part of the gross receipts subject to tax:

  • Return check charges for checks received by a retailer in payment of an account and returned by the bank because of insufficient funds.
  • Late payment charges billed on a balance that was not paid on the previous month’s bill.
  • Energy audit amounts charged to customers for a comprehensive energy audit provided by a retailer.
  • Conservation discounts on piped natural gas service metered charges when the discounts reduce the amount the customer is billed for the charges.
  • Security deposit interest paid to customers on deposits.

How to File and Pay?

Gross receipts derived from sales of piped natural gas and the 7.00% combined general rate of sales and use tax thereon are to be reported to the Department on Form E-500E, Combined General Rate Sales and Use Tax Return.

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