Natural Gas Surcharge Guide

The natural gas surcharge is owed by any person consuming natural gas in California who receives gas service from a public utility gas corporation. A public utility gas corporation is required to collect the surcharge from its customers, unless the customers are otherwise exempt from the surcharge. The natural gas surcharge is also owed by any person consuming natural gas in California that has been transported by an interstate pipeline.

Who is required to Register?

You are required to register if you are a:

• Public utility gas corporation, or
• Person consuming natural gas delivered by an interstate pipeline.

Visit our Tax Rates – Special Taxes and Fees page to view current and historical natural gas surcharge rates.

Consumers that receive natural gas directly from an interstate pipeline pay the same surcharge rate as if the consumer received service from a public utility gas corporation in the service territory the consumer is located. If the consumer is not located in a specific service territory, then the consumer must use the surcharge rate of the public utility gas corporation service territory closest to where the consumer is located.

File a Return Online – File your return through our online services homepage. Log in using your username and password and select the account for which you want to file a return. Then select the File a Return link for the filing period you want to file and follow the prompts.

Note: If you do not have a username and password, select the Sign Up Now link under the Create a Username heading from the online services homepage.

Additional Return Filing Options – You may also file your return(s) by mail using the return forms listed below:

Public utility corporations are required to file:

• CDTFA-501-NU, Natural Gas Surcharge Return for Public Utility Gas Corporations

Consumers that receive natural gas directly from an interstate pipeline are required to file:

• CDTFA-501-NC, Natural Gas Surcharge Return for Consumers – Interstate Pipeline

Visit our Tutorials page for how to file your Natural Gas Surcharge returns through our online services.

Returns must be received or postmarked by the due date to be considered timely, even if no amount is owed. If the due date falls on a Saturday, Sunday, or state holiday, returns postmarked or received by the next business day will be considered timely.

Payments

Make a Payment – Make payments through our online services homepage. Log in using your username and password and select the account for which you want to make a payment. Under the I Want To section, select the Make a Payment link and follow the prompts.

Additional Payment Options – Visit our website for additional convenient payment methods.

Electronic Funds Transfer (EFT) - Taxpayers with an estimated average monthly surcharge liability of $20,000 or more are required to pay amounts due by electronic funds transfer (EFT). We will notify you in writing if you are required to pay your surcharge electronically. Please visit our Electronic Funds Transfer (EFT) - Frequently Asked Questions (FAQ's) for payment methods and payment deadline information.

Payments must be received or postmarked by the due date to be considered timely. If the due date falls on a Saturday, Sunday or state holiday, payments postmarked or received by the next business day will be considered timely.

Interest also applies to late fee payments.

Additional Business Update Options – You may also notify us of any changes by:

• Using form CDTFA-345-SP, Notice of Business Change, Special Taxes and Fees Accounts, or
• Contacting our Customer Service Center at 1-800-400-7115 (CRS: 711) and selecting the option for "Special Taxes and Fees," or
• Sending a message through our website at Email Your Tax Questions.

For more information about record retention, please view Regulation 4901.

This is because the natural gas consumed by the natural gas storage provider is not provided as a service from a public utility gas corporation and is not taken directly from an interstate pipeline. In addition, natural gas storage providers normally do not sell or even own the natural gas stored for its customers. Natural gas storage providers are required by the California Public Utilities Commission (CPUC) to annually submit a list of customers to both the CPUC and the CDTFA.

• Natural gas consumed that was not provided to you as a service from a public utility gas corporation or was not received by you directly from an interstate pipeline.
• Use of natural gas to generate power for sale.
• Sale or purchase of natural gas for resale.
• Sale or use of natural gas for enhanced oil recovery.
• Natural gas used in cogeneration technology projects to produce electricity.
• Natural gas produced in California and transported on a proprietary pipeline.
• Natural gas consumption that is prohibited from taxation under the United States Constitution or the California Constitution.
• A public utility gas corporation is relieved from liability to collect the surcharge insofar as the base upon which the surcharge is imposed is represented by accounts which have been found to be worthless and charged off in accordance with generally accepted accounting principles.
• A municipality, district, or public agency that offers in published tariffs home weatherization services, rate assistance for low-income customers, or similar programs is relieved from liability to collect the surcharge from its customers located within its service territory.

If the seller is a public utility gas corporation, then the LNG sold to consumers would be subject to the natural gas surcharge and the seller would be required to collect the surcharge on the LNG sold to consumers.

Visit the sites below for more information about other state, federal, and local taxing and licensing information:

• The Governor's Office of Business and Economic Development (GO-Biz) offers extensive information on state, local, and federal permit requirements. For a listing of their assistance centers, visit GO-Biz.
• CalGold for information about permit and licensing requirements for other state, federal, and local authorities (for example, you may need to be registered with the Franchise Tax Board or the Employment Development Department).
• California Tax Service Center for additional tax information.

You may also want to consult with a tax professional for assistance on other agency requirements.

Additional Refund Filing Options - You may also file your claim for refund by filing either:

• A form CDTFA-101, Claim for Refund or Credit, or
• An amended return(s) stating the specific reason(s) for the overpayment.

Claims for refund must be in writing, state the reason for overpayment, specify the period for which you made the overpayment, and the amount of the refund requested. Additional refund details can be found on our Filing Claims for Refund - Special Taxes and Fees webpage.

You may email the claim form to the Refund Team or mail it to:

California Department of Tax and Fee Administration
Appeals and Data Analysis Branch (MIC 33)
P.O. Box 942879
Sacramento, CA 94279-0033

Deadline to File a Claim for Refund

Be sure to file your claim for refund by the applicable deadline. If you do not file on time, we cannot consider your claim, even if you overpaid the surcharge. You must file a claim for the refund by whichever of the following dates that occurs last:

• Three years after the due date of the return on which you overpaid the surcharge.
• Six months after you overpaid the surcharge.
• Six months from the date a determination (billing) became final.
• Three years from after the CDTFA collected an involuntary payment, such as from a levy or lien.

If you have questions about your deadline to file a refund claim, contact our Customer Service Center at 1-800-400-7115 (CRS:711) weekdays between 7:30 a.m. and 5:00 p.m., Pacific Time (except state holidays).