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What is natural gas use tax?

It is a tax that applies to the use of natural or manufactured gas by a consumer, if the person who sold the gas to the consumer has not paid public utility tax on the sale.  This tax is imposed only for natural gas delivered to a consumer through a pipeline.  The rate is the same as the state and city public utility taxes.  The value of the gas is the purchase price of the gas to the consumer and generally must include all or part of the transportation charges. 

Do I pay natural gas use tax on transportation charges?

If all or part of the transportation charges for the delivery of the gas is separately subject to the state’s and cities’ public utility taxes, those transportation charges can be excluded when paying the natural gas use tax.  Transportation charges that are not subject to public utility taxes are to be included when paying the use tax.

How do I pay the tax?

The tax is paid monthly or quarterly by consumers to the Department of Revenue.  If filing monthly you must file and pay electronically.  If filing quarterly you may file electronically or submit a Natural Gas Use Tax Addendum with your Combined Excise Tax Return.

What rate do I pay?

The natural or manufactured gas rate is the same as the public utility tax rate.  The state rate is currently .03852.  The city rates vary depending on the location and are listed on the Natural Gas Use Tax Addendum.

How are the funds distributed?

The state portion of the tax goes to the general fund. The city portion goes to the state treasurer to be distributed to the cities.