INCOME TAXES

6 Months Ended

Jun. 30, 2022

INCOME TAXES

INCOME TAXES

NOTE 13—INCOME TAXES

In May 2018, the Board of Directors unanimously approved a change of the Partnership’s federal income tax status from that of a pass-through partnership to that of a taxable entity, which became effective on September 24, 2018. Subsequent to the Partnership’s change in tax status, the Partnership’s provision for income taxes is based on the estimated annual effective tax rate plus discrete items.

Prior to September 24, 2018, the Partnership was organized as a pass-through entity for income tax purposes. As a result, the Partnership’s partners were responsible for federal and state income or similar taxes on their share of the Partnership’s taxable income with the exception of any entity-level income or similar taxes such as the Texas Franchise Tax. The Partnership recorded an income tax expense of $1.8 million and $2.1 million for the three and six months ended June 30, 2022. The income tax expense recorded by the Partnership for the three and six months ended June 30, 2022 primarily related to the significant increase in commodity prices which generated forecasted taxable net income for the year ended December 31, 2022.