Sunoco 2012 Annual Report Download - page 35

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
approximately 30 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. Any
modification to the federal income tax laws and interpretations thereof may or may not be applied retroactively.
Moreover, any such modification could make it more difficult or impossible for us to meet the exception which
allows publicly traded partnerships that generate qualifying income to be treated as partnerships (rather than
corporations) for U.S. federal income tax purposes, affect or cause us to change our business activities, or affect
the tax consequences of an investment in our common units. For example, members of Congress have been
considering substantive changes to the definition of qualifying income and the treatment of certain types of
income earned from partnerships. While these specific proposals would not appear to affect our treatment as a
partnership, we are unable to predict whether any of these changes, or other proposals, will ultimately be enacted.
Any such changes could negatively impact the value of an investment in our common units.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
See Item 1. (c) for a description of the locations and general character of our material properties.
ITEM 3. LEGAL PROCEEDINGS
There are certain legal and administrative proceedings arising prior to the February 2002 initial public offering
(“IPO”) pending against our Sunoco-affiliated predecessors and us (as successor to certain liabilities of those
predecessors). Although the ultimate outcome of these proceedings cannot be ascertained at this time, it is
reasonably possible that some of them may be resolved unfavorably. Sunoco has agreed to indemnify us for
100 percent of all losses from environmental liabilities related to the transferred assets arising prior to, and asserted
within 21 years of February 8, 2002. There is no monetary cap on this indemnification from Sunoco. Sunoco’s share
of liability for claims asserted thereafter will decrease by 10 percent each year through the thirtieth year following
the February 8, 2002 date. Any remediation liabilities not covered by this indemnity will be our responsibility. In
addition, Sunoco is obligated to indemnify us under certain other agreements executed after the IPO.
Additionally, we have received notices of violations and potential fines under various federal, state and local
provisions relating to the discharge of materials into the environment or protection of the environment. While we
believe that even if any one or more of the environmental proceedings listed below were decided against us, it
would not be material to our financial position, we are required to report environmental proceedings if we
reasonably believe that such proceedings will result in monetary sanctions in excess of $0.1 million.
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