Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

8. INCOME TAXES

The Partnership is not a taxable entity for U.S. federal income tax purposes; therefore, our federal statutory rate is zero percent. However, income apportionable to Texas is subject to Texas margin tax. Income attributable to the AMA assets prior to and including February 2019 was subject to federal and state income tax. Income earned on the AMA assets for periods subsequent to February 2019 was subject only to Texas margin tax on income apportionable to Texas.

For the year ended December 31, 2021, the variance from the federal statutory rate was primarily impacted by a state margin rate reduction associated with Occidental’s settlement of state audit matters and our Texas margin tax liability. For the year ended December 31, 2020, the variance from the federal statutory rate was primarily due to our Texas margin tax liability. For the year ended December 31, 2019, the variance from the federal statutory rate primarily was due to federal and state taxes on pre-acquisition income attributable to assets previously acquired from Anadarko, and our share of applicable Texas margin tax.

The components of income tax expense (benefit) are as follows:

	Year Ended December 31,
thousands	2021		2020		2019
Current income tax expense (benefit)
Federal income tax expense (benefit)	$	—	$	—	$	5,550
State income tax expense (benefit)	(37)		2,702		313
Total current income tax expense (benefit)	(37)		2,702		5,863
Deferred income tax expense (benefit)
Federal income tax expense (benefit)	—		—		2,782
State income tax expense (benefit)	(9,770)		3,296		4,827
Total deferred income tax expense (benefit)	(9,770)		3,296		7,609
Total income tax expense (benefit)	$	(9,807)	$	5,998	$	13,472

8. INCOME TAXES

Total income taxes differed from the amounts computed by applying the statutory income tax rate to income (loss) before income taxes. The sources of these differences are as follows:

	Year Ended December 31,
thousands except percentages	2021			2020			2019
Income (loss) before income taxes	$	934,192		$	522,850		$	821,172
Statutory tax rate	—		%	—		%	—		%
Tax computed at statutory rate	$	—		$	—		$	—
Adjustments resulting from:
Federal taxes on pre-acquisition income attributable to assets acquired from Anadarko	—			—			8,332
Texas margin tax expense (benefit) (1)	(9,807)			5,998			5,140
Income tax expense (benefit)	$	(9,807)		$	5,998		$	13,472
Effective tax rate	(1)		%	1		%	2		%

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(1)Includes a tax benefit of $12.5 million for the year ended December 31, 2021, related to a reduced Texas margin tax rate resulting from Occidental’s settlement of state audit matters.

The tax effects of temporary differences that give rise to significant portions of deferred tax assets (liabilities) are as follows:

	December 31,
thousands	2021		2020
Depreciable property	$	(12,395)	$	(22,061)
Other intangible assets	(486)		(812)
Other	456		678
Net long-term deferred income tax liabilities	$	(12,425)	$	(22,195)