Tax Guide for Natural Gas Surcharge
Getting Started

Application of Surcharge

The natural gas surcharge is assessed at a specific rate per therm upon the consumption of natural gas in California. Public utility gas corporations are required to separately state the natural gas surcharge on customer billing statements.

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.

Registration

Online Registration – Register with us for a natural gas surcharge account by selecting "Register for a New Business Activity." Visit the Online Services webpage for a list of information you may need to complete your registration.

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.

Surcharge Rate

The natural gas surcharge rates are set annually by the California Public Utilities Commission for each class of customer for the service territory of each public utility gas corporation.

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.

Return and Payment

The energy surcharge returns, and payment are due the last day of the month following each calendar quarter. For example, the First Quarter 2020 return was due April 30, 2020.

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:

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

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.

Penalty and Interest

The penalty for filing a late return and/or late fee payment is ten percent of the fee amount due for the period.

Interest also applies to late fee payments.

Updating Your Business Information with CDTFA

Update Business Information Online – Update your business information through our online services homepage. Log in using your username and password and select the account for which you wish to update. Select the More link under the I Want To section. Then select the option you are requesting to update under Account Maintenance.

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.

Record Retention

Records must be retained for at least four years from the time the fee is due unless we authorize you in writing to destroy them sooner.

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