I am looking at M.L.P,s but they all seem to say you may have to pay taxes in every state the company is functioning in I was planning to buy about 1,000 shares,it seems the distribution would be greatly reduced.Am igetting the wrong signal Will
From responses to a similar question on NS msg board -
Unless you have a lot of units (substantially more than 1,000), you probably don't have enough income to need to file in the various states. Scan the K-1 state income list for the highest income states and then go to those state websites and check their tax return instructions for their filing requirements.
Go to the EPD yahoo msg board and read posts by factoids. he is a wealth of knowledge. or go to investorvillage.com, go to EPD and look for factoid's posts there, too.
It's all there, you just have to be proactive.
A couple of states are like West Virginia where they assess a " withholding tax" on the MLP knowing that out of state residents will not file a return for such small amounts and the tax far exceeds what the true tax liability would be if you filed a return..... i.e. most would be zero but the cost to file the return exceeds the W VA withholding tax.