Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

8. INCOME TAXES

The Partnership is not a taxable entity for U.S. federal income tax purposes; therefore, the federal statutory rate is zero percent. However, income apportionable to Texas is subject to Texas margin tax.

For the year ended December 31, 2024, the variance from the federal statutory rate was primarily impacted by a state margin tax rate increase associated with no longer being included in Occidental’s affiliated group tax return beginning in September 2024 due to Occidental’s sale of 19.5 million of the Partnership’s common units in August 2024 and the resulting decrease in ownership, inclusive of its ownership in WES Operating. For the years ended December 31, 2023 and 2022, the variance from the federal statutory rate was primarily due to the Texas margin tax liability.

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

	Year Ended December 31,
thousands	2024		2023		2022
Current state income tax expense (benefit)	$	3,900	$	3,341	$	2,188
Deferred state income tax expense (benefit)	14,211		1,044		1,999
Total income tax expense (benefit)	$	18,111	$	4,385	$	4,187

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	2024			2023			2022
Income (loss) before income taxes	$	1,629,363		$	1,052,392		$	1,255,643
Statutory tax rate	—		%	—		%	—		%
Tax computed at statutory rate	$	—		$	—		$	—
Adjustments resulting from:
Texas margin tax expense (benefit)	18,111			4,385			4,187
Income tax expense (benefit)	$	18,111		$	4,385		$	4,187
Effective tax rate	1		%	—		%	—		%

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

	December 31,
thousands	2024		2023
Depreciable property	$	(30,984)	$	(15,467)
Other intangible assets	(1,412)		(588)
Other	2,717		587
Net long-term deferred income tax liabilities	$	(29,679)	$	(15,468)