ST 1998-01 - Natural Gas - November, 1998; Updated January 2016
Previously, natural gas was only provided to Ohio consumers
(commercial and Residential) by natural gas distribution
companies - utilities regulated by the Public Utilities
Commission of Ohio (PUCO). Currently, some commercial and
residential users can elect to purchase natural gas from
natural gas distribution companies or from non-utility
When natural gas is purchased from a public utility natural
gas distribution company, it is not subject to Ohio sales or
use tax. The natural gas distribution company must pay a
gross receipts excise tax at the rate of 4.75%, which is
recovered in the rates charged for the natural gas.
When natural gas is purchased from a non-utility gas supplier
and is delivered through pipes of the natural gas
distribution company (the traditional gas utility), the
purchase is subject to Ohio sales or use tax, unless the
purchaser can claim a statutory exception or exemption
(federal, state and local governments; schools; churches;
non-profit, charitable organizations; used primarily in a
manufacturing operation, used directly in farming, etc.).
Non-utility natural gas suppliers do not pay the 4.75% gross
receipts excise tax but must collect from the consumer the
sales or use taxes that may be due. Charges for delivery of the natural gas by a non-utility gas supplier are subject to sales or use tax even if the delivery charges are stated or billed separately from the amount charged for the natural gas.
 Changes to delivery charges are effective on August 1, 2003. Please see information release ST 2007-02 - Sales and Use Tax: “Delivery Charges” a Part of the “Price” of a Sale – Issued May, 2007
If you have any questions regarding this matter, you should
call us at 1-888-405-4039.
OHIO RELAY SERVICES FOR
THE HEARING OR SPEECH IMPAIRED