Sunoco 2014 Annual Report Download - page 32

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Our unitholders may be required to pay taxes on their share of our income even if they do not receive any cash distributions
from us.
Because our unitholders will be treated as partners to whom we will allocate taxable income which will be different in
amount than the cash we distribute, our unitholders will be required to pay any federal income taxes and, in some cases, state
and local income taxes on their share of our taxable income even if they receive no cash distributions from us. Our unitholders
may not receive cash distributions from us equal to their share of our taxable income or even equal to the actual tax liability
that result from that income.
Tax gain or loss on disposition of our limited partner units could be more or less than expected.
If our unitholders sell their common units, they will recognize a gain or loss equal to the difference between the amount
realized and their tax basis in those common units. Prior distributions to our unitholders in excess of the total net taxable
income the unitholder was allocated for a unit, which decreased their tax basis in that unit, will, in effect, become taxable
income to our unitholders if the common unit is sold at a price greater than their tax basis in that common unit, even if the price
they receive is less than their original cost. A substantial portion of the amount realized, whether or not representing gain, may
be ordinary income. In addition, if our unitholders sell their units, they may incur a tax liability in excess of the amount of cash
received from the sale.
Tax-exempt entities and non-U.S. persons face unique tax issues from owning our common units that may result in adverse
tax consequences to them.
Investment in common units by tax-exempt entities, such as individual retirement accounts ("IRAs"), and non-
U.S. persons raises issues unique to them. For example, virtually all of our income allocated to organizations that are exempt
from federal income tax, including individual retirement accounts and other retirement plans, will be unrelated business taxable
income and will be taxable to them. Distributions to non-U.S. persons will be reduced by withholding taxes at the highest
applicable effective tax rate, and non-U.S. persons will be required to file U.S. federal tax returns and pay tax on their share of
our taxable income. If you are a tax exempt entity or non-U.S. person, you should consult your tax advisor before investing in
our common units.
Our unitholders will likely be subject to state and local taxes and return filing requirements in states where they do not live
as a result of investing in our limited partner units.
In addition to federal income taxes, our unitholders will likely be subject to other taxes, including state and local taxes,
unincorporated business taxes and estate, inheritance or intangible taxes that are imposed by the various jurisdictions in which
we do business or own property, even if they do not live in any of those jurisdictions. Our unitholders will likely be required to
file state and local income tax returns and pay state and local income taxes in some or all of these various jurisdictions. Further,
our unitholders may be subject to penalties for failure to comply with those requirements. We currently conduct our business
and own assets in 35 states, most of which impose a personal income tax. As we make acquisitions or expand our business, we
may own assets or conduct business in additional states that impose a personal income tax. It is our unitholders’ responsibility
to file all United States federal, state and local tax returns.
The tax treatment of publicly traded partnerships or an investment in our common units could be subject to potential
legislative, judicial or administrative changes and differing interpretations, possibly on a retroactive basis.
The present federal income tax treatment of publicly traded partnerships, including us, or an investment in our common
units, may be modified by administrative, legislative or judicial interpretation at any time. For example, from time to time,
members of Congress propose and consider substantive changes to the existing federal income tax laws that affect publicly
traded partnerships. One such legislative proposal would have eliminated the qualifying income exception to the treatment of
all publicly traded partnerships as corporations, upon which we rely for our treatment as a partnership for federal income tax
purposes. We are unable to predict whether any of these changes or other proposals will be reintroduced or will ultimately be
enacted. Any such changes could negatively impact the value of an investment in our common units. Any modification to the
federal income tax laws and interpretations thereof may or may not be applied retroactively and could make it more difficult or
impossible to meet the exception for certain publicly traded partnerships to be treated as partnerships for federal income tax
purposes.