Bill would open MLPs to renewable energy investors

By Staff | May 21, 2013

Legislation recently introduced in the U.S. Senate could significantly level the playing field between fossil energy and renewable energy if passed by Congress and signed into law. The bill, titled the Master Limited Partnerships Parity Act, would allow investors in renewable energy projects access to the corporate structure of master limited partnerships (MLP), which offer significant tax benefits compared to other business structures. MLPs are currently only available to investors in fossil energy projects.

MLPs are taxed as a partnership, but ownership interests are traded like corporate stock on a market. While income generated by C corporations is taxed at both the corporate and shareholder level, MLPs are only taxed at the shareholder level, since they are treated as a partnership for tax purposes.
The bill was introduced by Sens. Chris Coons, D-Del.; Jerry Moran, R-Kan.; Debbie Stabenow, D-Mich.; and Lisa Murkowski, R-Alaska.