Because of the passthrough structure of MLPs, unitholders in multistate MLPs may owe tax in each state in which the MLP earns income.  Practically speaking, because of the large number of unitholders in any PTP and the deductions that are available to offset the income, the average investor is unlikely to have any significant tax liability in the states where he or she is a nonresident.  However, unitholders are advised to check the filing requirements of each state to be sure that they are in compliance.

Each state with an individual income tax has its own rate structure, standard deduction, and threshholds for imposing tax.  A table showing state income tax rates, income brackets and personal exemptions can be found on the website of the Federation of Tax Administrators, and can be reached by clicking here.