Westlake Chemical Partners LPWLKP

Westlake Chemical Partners LP Income Taxes Disclosure

10-KFiled Mar 4, 20262 min read
Income Taxes
The Partnership is a limited partnership and is treated as a partnership for U.S. federal income tax purposes and, therefore, is not liable for entity-level federal income taxes. The Partnership is, however, subject to state and local income taxes.
The components of income tax of the Partnership are as follows:
Year Ended December 31,
202520242023
Current
State and local$548 $921 $837 
Deferred
State and local(1)(86)(24)
Total provision$547 $835 $813 
The Partnership adopted ASU 2023-09 in the 2025 period and applied this standard prospectively. The adoption of this ASU resulted in additional income tax disclosures. The reconciliation of income tax expense at the U.S. statutory rate to the income tax expense is as follows:
Year Ended December 31,
2025
Amount
Percentage
Provision for federal income tax, at statutory rate$62,816 21.0 %
State income tax provision, net of federal income tax effect (1)
547 0.2 %
Partnership income not subject to entity-level federal income tax(62,816)(21.0)%
Total provision$547 0.2 %
____________________________
(1) State income taxes in Kentucky and Texas made up the majority (greater than 50 percent) of the tax effect in this category.
The comparative periods are presented under the previous guidance within Accounting Standards Codification 740. The reconciliation of income tax expense at the U.S. statutory rate to the income tax expense is as follows:
Year Ended December 31,
20242023
Provision for federal income tax, at statutory rate$77,699 $70,442 
State income tax provision, net of federal income tax effect835 813 
Partnership income not subject to entity-level federal income tax(77,699)(70,442)
Total provision$835 $813 
The tax effects of the principal temporary differences between financial reporting and income tax reporting are as follows:
December 31,
20252024
Property, plant and equipment$(1,199)$(1,323)
Turnaround costs(347)(223)
Total deferred tax liabilities$(1,546)$(1,546)
Balance sheet classifications
Noncurrent deferred tax liability$(1,546)$(1,546)
Total deferred tax liabilities$(1,546)$(1,546)

Historical Timeline

Fiscal YearFiled
2025Mar 4, 2026Showing above
2024Mar 5, 2025
2023Feb 28, 2024
2022Mar 1, 2023
2021Mar 2, 2022
2020Mar 2, 2021
2019Feb 28, 2020
2018Mar 1, 2019
2017Mar 1, 2018
2016Mar 7, 2017
2015Mar 8, 2016

About Income Taxes Disclosures

The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.

Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.

Other Available Disclosures

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