Income Taxes

12 Months Ended

Dec. 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.

The principal reasons for the difference between AB Holding’s effective tax rates and the UBT statutory tax rate of 4.0% are as follows:

	Years Ended December 31
	2022					2021					2020
	(in thousands)
UBT statutory rate		$	12,220	4.0	%		$	16,653	4.0	%		$	12,336	4.0	%
Federal tax on partnership gross business income		30,676		10.0			29,643		7.1			28,522		9.2
State income taxes		663		0.2			840		0.2			502		0.2
Credit for UBT paid by AB		(12,220)		(4.0)			(16,653)		(4.0)			(12,336)		(4.0)
Income tax expense and effective tax rate		$31,339		10.3	%		$	30,483	7.3	%		$	29,024	9.4	%

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.

	Years Ended December 31												% Change
	2022				2021				2020				2022-21		2021-20
	(in thousands)
Net income attributable to AB Unitholders		$	831,813			$	1,148,623			$	865,952		(27.6)	%	32.6	%
Multiplied by: weighted average equity ownership interest		36.7		%		36.2		%		35.6		%
Equity in net income attributable to AB Unitholders		$	305,504			$	416,326			$	308,404		(26.6)		35.0
AB qualifying revenues		$	2,775,693			$	2,779,281			$	2,740,137		(0.1)		1.4
Multiplied by: weighted average equity ownership interest for calculating tax		31.6		%		30.5		%		30.1		%
Multiplied by: federal tax		3.5		%		3.5		%		3.5		%
Federal income taxes		30,676				29,643				28,522
State income taxes		663				840				502
Total income taxes		$	31,339			$	30,483			$	29,024		2.8		5.0

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) enter into 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.

We recognize the effects of a tax position in the financial statements only if, as of the reporting date, it is “more likely than not” to be sustained based on its technical merits and their applicability to the facts and circumstances of the tax position. In making this assessment, we assume that the taxing authority will examine the tax position and have full knowledge of all relevant information. Accordingly, we have no liability for unrecognized tax benefits as of December 31, 2022 and 2021. A liability for unrecognized tax benefits, if required, would be recorded in income tax expense and affect the company’s effective tax rate.

As of December 31, 2022, AB Holding is no longer subject to U.S. federal, state, local or foreign examinations by tax authorities for years before 2018.