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I have been trying to bone up on MLPs for a few months. One of the negatives of pipe line ownership mentioned in something I read was the
potential to get charged state taxes from any state the pipe line runs through. Any experience with such a situation ?
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MLP's pay good yields because unlike corporations, they pay no income taxes. The whole cash stream goes to you as a partner and you are supposed to pay income taxes on it. Yes, that includes potential state taxes in every state. That is usually an issue with them mentioned in the fine print. I have never owned a pipeline with operations in many states, but I have never received a tax bill from a state.

Another potential liability. Don't hold the units too long.

These are high risk investments, good for income for a while, but not a good place for the rent money. They can be OK as part of a diversified portfolio.
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To my knowledge HFC is the refining side of Holly Frontier.
HEP is the MLP. Granted states collect revenue and if they raise
the rates, sooner or later it will be passed on to the consumer.
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You will be looking at a night mare of paper work. Been there and now avoid all MLP's. I would look into CEF's (close-end funds) with better yields and pay monthly dividends. http://www.cefconnect.com/

http://www.dividenddetective.com/mlp_tax_considerations.htm

Quillnpenn -
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