Do I use teflon tape or putty to seal the threads on the gas line to stove top?

Pipe dope or yellow Teflon tape. Never use white.

Plumbing Repair Guide: How To Use Teflon Tape - ACME HOW TO.com

Why not white teflon tape?

The big reason is that the tape can come apart and little bits of it can get into the gas system and clog up things like regulators and metering valves that make use of small orifices. The biggest difference between the white (water) teflon tape and the yellow (gas) teflon tape is that the yellow stuff is significantly thicker to reduce the chances of it breaking apart as you tighten the fitting. The usual pipe thread compound doesn't have this problem at all.
The yellow is a little thicker as well.