For years, the oil and gas industry has claimed that it only receives tax benefits that are available to every other company. This is, of course, patently false. From special treatments of royalties to so-called “percentage depletion,” fossil fuel businesses benefit from all sort of unique provisions that aren’t available to anyone else, including renewable energy companies.
Yesterday, Senator Chris Coons (D-DE) introduced legislation that would be an important step forward in fixing this imbalance. The MLP Parity Act allows renewable energy companies to receive a special tax treatment that has been the exclusive purview of fossil fuel companies for decades. Not only will the MLP Parity Act bring some balance to the energy marketplace, but it would also allow more Americans to invest in renewable energy.
At issue is something called “master limited partnerships.” (Yes, I’m aware that this name is potentially a bigger turn-off than “feed-in tariff.” Energy finance policy clearly wasn’t designed with mass marketing in mind. Please bear with me.) A master limited partnership is a form of corporate structure, just like the better-known limited liability company or C-Corporation, that has unique tax attributes. MLP’s are a type of partnership and, like other partnerships, they don’t pay a corporate income tax. Instead, all of the earnings pass directly through to the partners, who then pay taxes on the income.
via Master Of My Domain: What The Heck Are Master Limited Partnerships And How Could They Boost Clean Energy? | ThinkProgress.
Categories: Electricity, Energy, Finance