Income Taxes

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

AB Holding is a publicly-traded partnership (“PTP”) for federal tax purposes and, accordingly, is not subject to federal or state corporate income taxes. However, AB Holding is subject to the 4.0% New York City unincorporated business tax (“UBT”), net of credits for UBT paid by AB, and to a 3.5% federal tax on partnership gross income from the active conduct of a trade or business. AB Holding’s partnership gross income is derived from its interest in AB.

AB Holding’s federal income tax is computed by multiplying certain AB qualifying revenues (primarily U.S. investment advisory fees, research payments and brokerage commissions) by AB Holding’s ownership interest in AB, multiplied by

the 3.5% tax rate. AB Holding Units in AB’s consolidated rabbi trust are not considered outstanding for purposes of calculating AB Holding’s ownership interest in AB.

	Three Months Ended March 31,
	2022			2021			% Change
	(in thousands)
Net income attributable to AB Unitholders	$	260,727		$	244,131		6.8	%
Multiplied by: weighted average equity ownership interest	36.2		%	36.4		%
Equity in net income attributable to AB Unitholders	$	94,353		$	88,907		6.1
AB qualifying revenues	$	744,717		$	706,392		5.4
Multiplied by: weighted average equity ownership interest for calculating tax	31.4		%	30.6		%
Multiplied by: federal tax	3.5		%	3.5		%
Federal income taxes	8,186			7,572
State income taxes	239			248
Total income taxes	$	8,425		$	7,820		7.7
Effective tax rate	8.9		%	8.8		%

In order to preserve AB Holding’s status as a PTP for federal income tax purposes, management ensures that AB Holding does not directly or indirectly (through AB) engage in a substantial new line of business. If AB Holding were to lose its status as a PTP, it would be subject to corporate income tax, which would reduce materially AB Holding’s net income and its quarterly distributions to AB Holding Unitholders.