|ENTERPRISE PRODUCTS PARTNERS L P filed this Form 424B3 on 02/01/2018|
Enterprise Parent does not believe the final Treasury Regulations affect its ability to be treated as a partnership for federal income tax purposes.
In addition, at the state level, several states have been evaluating ways to subject partnerships and limited liability companies to entity-level taxation through the imposition of state income, franchise, capital, and other forms of business taxes. We currently own property or do business in a substantial number of states, many of which impose some form of tax obligation on us. Imposition of any of these taxes in jurisdictions in which we own assets or conduct business or an increase in the existing tax rates would reduce the cash available for payment on the notes.
If the Internal Revenue Service (IRS) makes audit adjustments to our or Enterprise Parents income tax returns for tax years beginning after December 31, 2017, it (and some states) may assess and collect any taxes (including any applicable penalties and interest) resulting from such audit adjustments directly from us or Enterprise Parent, in which case our or Enterprise Parents ability to service our debt (including the notes) and pay operating expenses could be negatively impacted.
Pursuant to the Bipartisan Budget Act of 2015, for tax years beginning after December 31, 2017, if the IRS makes audit adjustments to income tax returns of entities treated as partnerships for federal income tax purposes, including us and Enterprise Parent, it (and some states) may assess and collect any taxes (including any applicable penalties and interest) resulting from such audit adjustments directly from the entity. To the extent possible under the new rules, our managing member may elect to either pay such taxes, penalties and interest directly to the IRS or, if we are eligible, issue a revised Schedule K-1 to our members, including Enterprise Parent, with respect to an audited and adjusted return. The general partner of Enterprise Parent may also make such an election, including with respect to taxes, penalties and interest attributable to a revised Schedule K-1 from us, to either pay the taxes, penalties and interest directly to the IRS or, if it is eligible, issue a revised Schedule K-1 to each unitholder and former unitholder of Enterprise Parent with respect to an audited and adjusted return. There can be no assurance that such elections will be practical, permissible or effective in all circumstances. If, as a result of any such audit adjustment, we or Enterprise Parent make payments of taxes, penalties and interest, our cash available for servicing debt and satisfying operating expenses might be substantially reduced.