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Form Mcf-2 - Instructions Sheet For Completing Natural Gas Distribution Company Tax Return Page 3

Prescribed Tax Form

MCF-2C (05/01)

Instructions for Completing Natural Gas Distribution Company Tax Return (MCF-2)

(Companies Using Aggregation Tax Reporting Method)

Aggregation Method

Companies with less than 50,000 customers may elect to aggregate the natural gas they distribute

to all customers and report their liability as if all gas were distributed to a single customer. This

alleviates the distribution company from the requirement of calculating the tax for each

individual customer and summing those calculations in order to file their return.

Reporting Periods and Due Dates

Quarterly tax returns are due by the 20

day of February, May, August, and November for the

preceding calendar quarter. If the due date falls on a weekend or state holiday, the due date is the

next business day.

Non-Taxable Distribution

Do not report on lines 1, 2, 3, or 4 of the return the distribution of natural gas to the federal

government or natural gas produced by an end user that is consumed by that end user and not

distributed through the facilities of a natural gas company.

Computation of the Tax

As a natural gas distribution company that has elected to aggregate, the tax is computed as if all

the natural gas you distributed were distributed to a single customer. Although returns are due

quarterly, the tax is computed monthly. The first 100 MCF’s of natural gas distributed each

month is subject to a rate of $.1593 The next 1,900 MCF’s distributed each month is subject to

a rate of $.0877. All MCF’s over 2,000 distributed each month is subject to a rate of $.0411.

All natural gas distributed to flex customers is taxed at a rate of $.02. Flex customers are all

industrial or commercial facilities that have consumed more than one billion cubic feet of natural

gas in one year at a single location during any of the previous 5 years. A flex customer is also

any industrial or commercial facility that purchases natural gas at a discounted rate under special

arrangements with the PUCO or a municipality.

Any end user that meets the definition of a flex customer on January 1, 2000, or thereafter,

remains a flex customer for purposes of this tax.

Form Mcf-2 - Instructions Sheet For Completing Natural Gas Distribution Company Tax Return Page 3