Energy Resources Surcharge (Electrical) – Frequently Asked Questions (FAQs)

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Energy Resources Surcharge (Electrical)

The surcharge is a tax imposed on consumers, based on the quantity of kilowatt-hours consumed in California, for the consumption of electrical energy purchased from an electric utility.

The funds in the Energy Resources Programs Account of the General Fund are used for ongoing energy programs and projects deemed appropriate by the Legislature, including but not limited to, activities of the California Energy Commission.

Every person who consumes electrical energy in California that is purchased from an electric utility is liable for the surcharge.

The surcharge is assessed on the quantity of kilowatt-hours consumed in California.

Registration

You must register with the CDTFA, file a return, and make payments to the CDTFA if you are:

  • An electric utility, electrical service provider, or electrical corporation that sells electrical energy to California consumers; or
  • A California consumer who purchases electrical energy from a utility, which is not subject to the Energy Resources Surcharge Law (such as an out-of-state utility or the Bureau of Reclamation), or from a utility which has not collected and paid the surcharge to the CDTFA.

Go to our online registration system, and select "Register a business activity with CDTFA." The system is convenient, secure, and available 24 hours a day. Visit our Information Needed to Get Started Web page for help to complete your application.

You may also register in person at one of our field office locations by use of a kiosk. If you have questions, please contact our Customer Service Center at 1-800-400-7115 (TTY: 711), Monday through Friday, 8:00 a.m. – 5:00 p.m. (Pacific time), excluding state holidays.

If you are an electrical energy provider, you may be required to register with the California Public Utilities Commission (CPUC). Please contact the California Public Utilities Commission for more information.

The Governor's Office of Business and Economic Development (GO-Biz) offers extensive information on state, local, and federal permit requirements. For a listing of their assistance centers, visit the Governor's Office of Business and Economic Development website.

Visit CalGold for help with permit and licensing requirements for other state, federal, and local authorities (for example, you may need to be registered with the Franchise Tax Board or the Employment Development Department.

Visit California's Tax Service Center for additional tax information.

You may also want to consult with a tax professional for assistance on other agency requirements.

You should notify the CDTFA of any change of business ownership, email address, mailing address or location, phone or fax number, to ensure that returns and information about the surcharge are received timely. Use form CDTFA-345-SP, Notice of Business Change, Special Taxes and Fees Department Accounts, to notify the CDTFA of changes.

You may also contact the CDTFA Customer Service Center at 1-800-400-7115 (TTY: 711), Monday through Friday (except state holidays 8:00 a.m. to 5:00 p.m. (Pacific time), and select the option for "Special Taxes and Fees" or send a message through our website at Email Your Tax Questions.

Collecting the Surcharge

The California Energy Commission determines the surcharge rate at a public meeting each November to be effective January of the following calendar year (Energy Resources Surcharge Law Section 40016).

The current and historical surcharge rates are available on our rates page.

Yes. The surcharge does not apply to:

  • The consumption of electrical energy which this state is prohibited from taxing under the United States Constitution or under the California Constitution. (Energy Resources Surcharge Law Section 40041)
  • The consumption by an electric utility of purchased electrical energy that is used directly, lost by dissipation, or unaccounted for in accordance with generally accepted accounting principles by the electric utility in the process of generation, transmission, and distribution of electrical energy. (Energy Resources Surcharge Law Section 40043)
  • The consumption of electrical energy by foreign governments or by any state of the United States other than the State of California. (Energy Resources Surcharge Regulation 2315)
  • The consumption of electrical energy by the following persons (Energy Resources Surcharge Regulation 2316):
    • The United States, its unincorporated agencies, and instrumentalities;
    • Any incorporated agency or instrumentality of the United States wholly owned by either the United States or by a corporation wholly owned by the United States;
    • The American National Red Cross and its chapters and branches;
    • Insurance companies, including title insurance companies, subject to taxation under California Constitution, Article XIII, Section 28;
    • Banks located within the limits of this state (excludes state banks and national banking associations);
    • Enrolled Indians purchasing and consuming electrical energy on Indian reservations;
    • Career consular officers and employees of certain foreign governments who are exempt from tax by treaties and other diplomatic agreements with the United States;
    • Federal credit unions organized in accordance with the provisions of the Federal Credit Union Act
  • The consumption by an electric utility of self-generated electrical energy. (Energy Resources Surcharge Regulation 2317)
  • The consumption by an electric utility for purposes other than directly in the process of generation, transmission, and/or distribution of electrical energy that was used from a pool of self-generated and purchased electricity. Examples include electrical energy used in street lighting or for office/warehouse, outdoor advertising, off-street parking facilities, and other similar purposes. (Energy Resources Surcharge Regulation 2317)

Yes. If your business sells electrical energy to consumers, your business is required to collect the surcharge regardless of who delivers the electrical energy to your customers. Delivery charges are not subject to the surcharge.

Filing and Making a Payment

A return for the preceding quarterly period must be filed and the surcharge amount due must be paid on or before the last day of the month following each calendar quarter. The Electrical Energy Surcharge Return (BOE-501-EU) is filed by an electric utility. The Consumer's Electrical Energy Surcharge Return (BOE-501-EC) is filed by consumers. The CDTFA may require consumers to file returns for other periods prescribed by the CDTFA. The CDTFA automatically sends returns to registrants of the program. All registrants should receive a return within 15 days of the due date. If you do not receive a return, please contact our Customer Service Center at 1-800-400-7115, Monday through Friday, 8:00 a.m. – 5:00 p.m. (Pacific time), excluding state holidays. Even if a registrant does not receive a return from the CDTFA, registrants are still required to file and pay timely and are not relieved from the requirement to file/pay timely.

Returns and/or payments must be postmarked by the due date to be considered timely. If the due date falls on a Saturday, Sunday, or state holiday, returns and/or payments postmarked or received by the next business day will be considered timely.

Several options are available to make a payment including: check or money order, credit card payment, and Electronic Fund Transfer (EFT). Taxpayers with an estimated average monthly tax payment of $20,000 or more are required to pay by EFT. Please note: If you are making a payment via credit card, a vendor charge of 2.3 percent will be added as a service fee. This service fee is retained by the vendor and is not revenue to the CDTFA. The minimum fee is $1.00.

You may also submit your payment with your return. Make your check or money order payable to "California Department of Tax and Fee Administration." Always write your account number on your check or money order and make a copy for your records. Payments must be postmarked by the due date to be considered timely. If the due date falls on a Saturday, Sunday, or state holiday, payments postmarked or received by the next business day will be considered timely.

Records must be retained for at least four years from the time the surcharge is due unless the CDTFA authorizes you, in writing, to destroy them sooner. For additional information regarding records retention, please view Energy Resources Surcharge Regulation 2343 and Special Taxes Administration Regulation 4901.

If you have overpaid the surcharge directly to the CDTFA, you may file a claim by using form CDTFA-101, Claim for Refund or Credit, or by filing an amended return(s) stating the specific reason(s) for the overpayment. Claims for refund must be in writing and should specify the period for which you are making the claim and the amount of the refund. Additional refund details can be found on our refund information page.

Mail claims to:

California Department of Tax and Fee Administration
Business Tax and Fee Division
Appeals and Data Analysis Branch (MIC: 33)
P.O. Box 942879
Sacramento, CA 94279-0033

Whichever of the following dates that occurs last is your filing deadline:

  • Three years from the due date of the return on which you overpaid the surcharge.
  • Six months from the date you overpaid the surcharge.
  • Six months from the date a determination (billing) became final.
  • Three years from the date the CDTFA collected an involuntary payment, such as from a levy or lien.

Be sure to file your claim for refund by the applicable deadline. If you do not file on time, the CDTFA cannot consider your claim, even if you overpaid the surcharge. If you have questions about your deadline to file a refund claim, contact our Customer Service Center at 1-800-400-7115, Monday through Friday, 8:00 a.m. to 5:00 p.m. (Pacific time), excluding state holidays.