Sunoco LP

For the period ended Dec 31, 2024. Filed Feb 14, 2025.

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FY2024 · Filed Feb 14, 2025

SUN$63.21+0.8%Stored close · as of Nov 10, 2026

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16. Income Tax Expense

Income Tax Expense

As a partnership, we are generally not subject to federal income tax and most state income taxes. However, the Partnership conducts certain activities through corporate subsidiaries which are subject to federal and state income taxes.

The Partnership’s income before income tax expense by geographic area is shown in the table below:

	Year Ended December 31,
	2024	2023	2022
United States	$1,040	$430	$501
Foreign	9	—	—
Total	$1,049	$430	$501

The components of the federal and state income tax expense (benefit) are summarized as follows:

	Year Ended December 31,
	2024	2023	2022
Current:
Federal	$152	$16	$—
State	37	7	(2)
Total current income tax expense (benefit)	189	23	(2)
Deferred:
Federal	(19)	9	24
State	5	4	4
Total deferred tax expense (benefit)	(14)	13	28
Income tax expense	$175	$36	$26

Our effective tax rate differs from the statutory rate primarily due to Partnership earnings that are not subject to U.S. federal and most state income taxes at the Partnership level. A reconciliation of income tax expense at the U.S. federal statutory rate to net income tax expense is as follows:

	Year Ended December 31,
	2024	2023	2022
(in millions)
Income tax expense at United States statutory rate	$220	$90	$105
Increase (reduction) in income taxes resulting from:
Partnership earnings not subject to tax	(84)	(64)	(74)
Non-deductible goodwill	9	—	—
State and local tax, including federal expense	33	10	1
Other	(3)	—	(6)
Income tax expense	$175	$36	$26

Deferred taxes result from the temporary differences between financial reporting carrying amounts and the tax basis of existing assets and liabilities. Principal components of deferred tax assets and liabilities were as follows:

	December 31, 2024	December 31, 2023
Deferred tax assets:
Net operating and other loss carry forwards	$16	$3
Other	18	21
Total deferred tax assets	34	24
Deferred tax liabilities:
Property and equipment	49	55
Trademarks and other intangibles	82	91
Investments in affiliates	53	44
Other	1	—
Total deferred tax liabilities	185	190
Net deferred income tax liabilities	$151	$166

As of December 31, 2024, Sunoco Retail, a corporate subsidiary of the Partnership, had a state net operating loss carryforward of $20 million, which we expect to fully utilize. Sunoco Retail has no federal net operating loss carryforward. A foreign subsidiary of Sunoco Retail LLC had a net operating loss carryforward of $56 million, which we expect to fully utilize.

As of December 31, 2024, we had $11 million ($8 million after federal income tax benefits) related to tax positions which, if recognized, would impact our effective tax rate. We did not recognize any changes in unrecognized tax benefits in 2024, 2023 or 2022.

We accrue interest and penalties on income tax underpayments (overpayments) as a component of income tax expense. During 2024, we recognized interest and penalties of $1 million. At December 31, 2024, we had interest and penalties accrued of $4 million, net of taxes.

The IRS is auditing a 2018 income tax refund claim filed by a wholly owned subsidiary of the Partnership. In general, the Partnership and its subsidiaries are no longer subject to examination by the IRS and most state jurisdictions for 2018 and prior years.

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