Qualifying Income of a Publicly Traded Partnership under IRC 7704

Private Letter Ruling 201206004

This responds to a letter dated June 3, 2011, submitted on behalf of Company, and subsequent correspondence, requesting a ruling concerning the qualifying income exception to the publicly traded partnership rules of § 7704 of the Internal Revenue Code.

Company is a limited partnership organized under the laws of State.  Company is a “publicly traded partnership” within the meaning of § 7704(b).  Company, through affiliated limited partnerships or disregarded entities, is principally engaged in the transportation, storage and distribution of refined petroleum products.  This ruling request involves fees Company charges as part of its fuel additization and ethanol blending activities at its refined product terminals.

Company owns X refined product terminals.  Company’s refined product terminals receive petroleum products from refineries, major common-carrier pipelines or other vessels.  Company stores these products at its refined product terminals which it then loads onto delivery vehicles for transportation to the next point in the fuel supply chain.  Company charges a fee for receiving and loading fuels onto delivery vehicles for transportation.  During the loading process, Company also injects fuel additives and blends ethanol into the petroleum products.  Company represents that it acts as a wholesale distributor of refined petroleum products and is not engaged in retail activity

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