Piped Natural Gas Tax.
§ 105-187.40. Definitions.
The definitions in G.S. 105-228.90 and the following definitions apply in this Article:
(1) Gas city. - A city in this State that operated a piped natural gas distribution system as of July 1, 1998. These cities are Bessemer City, Greenville, Kings Mountain, Lexington, Monroe, Rocky Mount, Shelby, and Wilson.
(2) Local distribution company. - A natural gas company to whom the North Carolina Utilities Commission has issued a franchise under Chapter 62 of the General Statutes to serve an area of this State.
(3) Premises. - Defined in G.S. 62-110.2. When applying the definition of premises to this Article, electric service is to be construed as piped natural gas service.
(4) Sales customer. - An end-user who does not have direct access to an interstate gas pipeline and whose piped natural gas is delivered by the seller of the gas.
(5) Transportation customer. - An end-user who does not have direct access to an interstate gas pipeline and whose piped natural gas is delivered by a person who is not the seller of the gas. (1998-22, s. 1.)
§ 105-187.41. Tax imposed on piped natural gas.
(a) Scope. - An excise tax is imposed on piped natural gas received for consumption in this State. This tax is imposed in lieu of a sales and use tax and a percentage gross receipts tax on piped natural gas.
(b) Rate. - The tax rate is set in the table below. The tax rate is based on monthly therm volumes of piped natural gas received by the end-user of the gas. If an end-user receives piped natural gas that is metered through two or more separate measuring devices, the tax is calculated separately on the volume metered through each device rather than on the total volume metered through all measuring devices, unless the devices are located on the same premises and are part of the same billing account. In that circumstance, the tax is calculated on the total volume metered through the two or more separate measuring devices.
Monthly Volume of Rate Per Therm
First 200 $.047
201 to 15,000 .035
15,001 to 60,000 .024
60,001 to 500,000 .015
Over 500,000 .003
(c) Exemptions. - The tax imposed by this section does not apply to any of the following:
(1) Piped natural gas received by a gas city for consumption by that city.
(2) Piped natural gas delivered by a gas city to a sales or transportation customer of the gas city.
(3) Piped natural gas received by a manufacturer for use in connection with the operation of the manufacturing facility. To be eligible for the exemption, a person must have a manufacturer's certificate issued under G.S. 105-164.28A. A person who uses piped natural gas for an unauthorized purpose is liable for any tax due on the gas.
(4) Piped natural gas received by a farmer to be used for any farming purpose other than preparing food, heating dwellings, and other household purposes. To be eligible for the exemption, a person must have a farmer's certificate issued under G.S. 105-164.28A. A person who uses piped natural gas for an unauthorized purpose is liable for any tax due on the gas.
(d) Repealed by Session Laws 2007-397, s. 11(d), effective July 1, 2010. (1998-22, s. 1; 2007-397, ss. 11(a)-(e).)
§ 105-187.42. Liability for the tax.
The excise tax imposed by this section on piped natural gas is payable as follows:
(1) For piped natural gas delivered by a local distribution company to a sales or transportation customer, the tax is payable by the local distribution company.
(2) For piped natural gas delivered by a person who is not a local distribution company to a sales or transportation customer, the tax is payable by that person.
(3) For piped natural gas received by a person by means of direct access to an interstate gas pipeline for consumption by that person, the tax is payable by that person. (1998-22, s. 1.)
§ 105-187.43. Payment of the tax.
(a) Payment. - The tax imposed by this Article is payable monthly. A monthly payment is due by the 20th day of the month following the calendar month in which liability for the tax accrues. The tax imposed by this Article on piped natural gas delivered to a sales or transportation customer accrues when the gas is delivered. The tax payable on piped natural gas received by a person who has direct access to an interstate pipeline for consumption by that person accrues when the gas is received.
(b) Prepayment. - A taxpayer who is consistently liable for at least twenty thousand dollars ($20,000) of tax a month must make a monthly prepayment of the next month's tax liability. This requirement applies when the taxpayer meets the threshold and the Secretary notifies the taxpayer to make prepayments. A prepayment is due on the date a monthly payment is due. The prepayment must equal at least sixty five percent (65%) of any of the following:
(1) The amount of tax due for the current month.
(2) The amount of tax due for the same month in the preceding year.
(3) The average monthly amount of tax due in the preceding calendar year.
(c) Return. - A return is due quarterly. A quarterly return covers a calendar quarter and is due by the last day of the month that follows the quarter covered by the return. (1998-22, s. 1; 1999-337, s. 32(a); 2001-427, s. 6(f); 2006-33, s. 13; 2012-79, s. 2.13.)
§ 105-187.44. Distribution of part of tax proceeds to cities.
(a) City Information. - A quarterly return filed under this Article must indicate the amount of tax attributable to the following:
(1) Piped natural gas delivered during the quarter to sales or transportation customers in each city in the State.
(2) Piped natural gas received during the quarter in each city in the State by persons who have direct access to an interstate gas pipeline and who receive the gas for their own consumption.
If a tax return does not state this information, the Secretary must determine how much of the tax proceeds are to be attributed to each city.
(b) Distribution. - Within 75 days after the end of each calendar quarter, the Secretary must distribute to the cities part of the tax proceeds collected under this Article during that quarter. The amount to be distributed to a city is one-half of the amount of tax attributable to that city for that quarter under subsection (a) of this section. The General Assembly finds that the revenue distributed under this section is local revenue, not a State expenditure, for the purpose of Section 5(3) of Article III of the North Carolina Constitution. Therefore, the Governor may not reduce or withhold the distribution. (1998-22, s. 1; 1998-217, s. 32(b); 1999-337, s. 32(b); 2002-120, s. 3.)
§ 105-187.45. Information exchange and information returns.
(a) Utilities Information. - The North Carolina Utilities Commission or the Public Staff of that Commission must give the Secretary a list of the entities that receive piped natural gas from an interstate pipeline and any other information available to the Commission that the Secretary asks for in administering the tax imposed by this Article.
(b) Information Return. - The Secretary may require the operator of an interstate pipeline to report the amount of piped natural gas taken from the pipeline in this State, the persons that received the gas, and the volume received by each person. (1998-22, s. 1.)
§ 105-187.46. Records and audits.
(a) Records. - A person who is required to file a return under this Article must keep a record of all documents used to determine information provided in the return. The records must be kept for three years after the due date of the return to which the records apply.
(b) Audits. - The Secretary may audit a person who is required to file a return under this Article. (1998-22, s. 1.)
§ 105-187.47. Reserved for future codification purposes.
§ 105-187.48. Reserved for future codification purposes.
§ 105-187.49. Reserved for future codification purposes.