Natural Gas Fixed Charges Subject to South Carolina Tax

The South Carolina Department of Revenue has issued a letter ruling advising that monthly fixed charges billed by a natural gas company are subject to South Carolina sales and use tax because they are part of the overall agreement for the sale of natural gas. The charges are therefore taxable even if a customer does not use gas during a billing period. However, if the sale of natural gas is otherwise exempt, such as the sale of natural gas for residential purposes, the monthly fixed charges are not taxable. (Revenue Ruling 12-2, South Carolina Department of Revenue, March 20, 2012)

Posted on May 21, 2012