Association Accomplishments
The National Association of Publicly Traded Partnerships has had a sizeable impact on federal and state tax policy toward PTPs since its origin in 1983. These include:
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Responsible for the continued existence of publicly traded partnerships. In 1987, when Congressional tax writers were set to tax all PTPs as corporations, the then Coalition of Publicly Traded Partnerships won a compromise which preserved permanent partnership taxation for PTPs earning specific types of income (passive investment income or income from natural resources and real estate activities), and won a 10-year grandfather period for existing PTPs not meeting the new standards. In 1997 the grandfather period was extended permanently for nonqualifying PTPs willing to pay a small excise tax.
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Obtained favorable clarification of the 1987 provisions in the 1988 technical corrections bill.
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Worked with Congressional staff to obtain a number of changes in the language of “carried interest” legislation in the 110th and 111th Congresses to ensure that traditional PTPs were not harmed by efforts to change taxation of investment fund managers (legislation was not enacted as of the end of the 111th Congress).
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Persuaded Congress in 2008 to expand the qualifying income definition to include transportation and storage of ethanol, biodiesel, and other alternative fuels.
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Achieved enactment in 2004 of a provision to make PTPs a qualifying income source for mutual funds under the regulated investment company rules of the tax code.
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Obtained repeal in 1993 of a discriminatory provision treating all PTP income allocated to a tax-exempt organization, regardless of its nature, as unrelated business taxable income. PTPs are now treated like other partnerships, i.e., income will not be treated as UBI if it falls within one of the exceptions such as interest and dividends.
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Successfully influenced 1993 Congressional legislation to regulate partnership roll-up transactions to exclude transactions involving only PTPs and to make the rules for covered transactions practicable.
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Before the 1987 legislation, blocked efforts to include the taxation of PTPs as corporations in the Deficit Reduction Act of 1984 and the Tax Reform Act of 1986, and played an instrumental role in removing taxation of partnerships with more than 35 partners as corporations from the Treasury Department's 1984 tax reform proposal.
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Modified partnership provisions in the Deficit Reduction Act of 1984 that would have adversely affected PTP operations.
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Worked with the IRS to obtain procedures for administrative relief with regard to filing returns after a technical termination.
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Favorably influenced provisions dealing with PTPs in the regulations on withholding for foreign partners under section 1446.
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Obtained favorable clarification of the 1987 provisions from the Treasury Department.
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Persuaded the IRS to provide a safe harbor based on SIC codes for determining whether a proposed business activity under the transition rule for the 1987 legislation that provided grandfathered PTPs with the certainty needed to plan future business activities.
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Persuaded the IRS to permit the use of curative allocations in its regulations dealing with property contributed by a partner under section 704(c).
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Persuaded the Federal Energy Regulatory Commission (FERC) to include PTPs in proxy groups used for setting pipeline rates, and to count the full amount of partnership distributions in their discounted cash flow formula rather than capping them at the level of earnings.
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Successfully advocated a change in FERC policy regarding the income tax allowance. The policy allows PTPs and other pass-through entities to include such an allowance in their ratemaking as long as their partners are subject to income tax.
State Legislation and Regulation
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Obtained exclusion of publicly traded partnerships from several states’ requirements for withholding on partnership distributions to nonresidents, and from model withholding legislation promulgated by the Multistate Tax Commission.
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Obtained an exemption for publicly traded partnerships from the Illinois Department of Revenue’s combined unitary reporting requirements.