Do I need to use teflon tape when hooking up gas lines? Although the stand alone heater was working fine, the gas company said it had a leak. I feel as if they just wanted to make some money off me. How can I test a heater to see if it does have leaks? Soapy water all over?

No do not use tape on joints.

Water may bubble at the point,

With that said and this is a gas line, since you have to ask those questions, you should not be touching them and should call a professional.

If you use teflon tape, you need to use the yellow type, rated for gas.