Instructions For Form Mcf 2 - Natural Gas Distribution Company Tax Return

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MCF 2C
Rev. 3/10
P .O. Box 530
Columbus, OH 43216-0530
Instructions for Completing Natural Gas Distribution Company Tax Return (MCF 2)
(Companies Using Aggregation Tax Reporting Method)
Aggregation Method
Companies with fewer than 70,000 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 fi le their return.
Reporting Periods and Due Dates
Quarterly tax returns are due by the 20th 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.
Nontaxable 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
was distributed to a single customer. Although returns are due quarterly, the tax is computed monthly. The fi rst 100 MCFs of
natural gas distributed each month is subject to a rate of $.1593. The next 1,900 MCFs distributed each month is subject
to a rate of $.0877. All MCFs over 2,000 distributed each month is subject to a rate of $.0411.
All natural gas distributed to fl ex 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
fi ve years. A fl ex 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 defi nition of a fl ex customer on Jan. 1, 2000, or thereafter, remains a fl ex customer for purposes
of this tax.
As an example, you distribute a total of 32,500 MCFs in July, 33,500 MCFs in August and 33,000 MCFs in September. Since
your tax is computed as if you distributed all the natural gas to a single customer, your liability for the third-quarter return
would be calculated as follows:
MCFs
Rate
Tax
300
x
.1593
=
$47.79
5,700
x
.0877
=
$499.89
93,000
x
.0411
=
$3,822.30
Line 1 column B – Enter the MCFs distributed at the $.1593 rate.
Line 1 column C – Multiply the MCFs in column A by the tax rate of .1593.
Line 2 column B – Enter the MCFs distributed at the $.0877 rate.
Line 2 column C – Multiply the MCFs in column A by the tax rate of .0877.
Line 3 column B – Enter the MCFs distributed at the $.0411 rate.
Line 3 column C – Multiply the MCFs in column A times the tax rate of .0411.
Line 4 column B – Enter the MCFs distributed to all fl ex customers.
Line 4 column C – Enter the tax for all fl ex customers at this rate.
Line 5 – Enter the total of column C lines 1, 2, 3 and 4.

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