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Income Tax Expense
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Tax Income Tax Expense
As a partnership, we are generally not subject to federal income tax and most state income taxes. However, the Partnership conducts certain activities through corporate subsidiaries which are subject to federal and state income taxes.
The Partnership’s income before income tax expense by geographic area is shown in the table below:
Year Ended December 31,
202420232022
United States$1,040 $430 $501 
Foreign9 — — 
Total$1,049 $430 $501 
The components of the federal and state income tax expense (benefit) are summarized as follows:
Year Ended December 31,
202420232022
Current:
Federal$152 $16 $— 
State37 7 (2)
Total current income tax expense (benefit)189 23 (2)
Deferred: 
Federal(19)9 24 
State5 4 4 
Total deferred tax expense (benefit)(14)13 28 
Income tax expense$175 $36 $26 
Our effective tax rate differs from the statutory rate primarily due to Partnership earnings that are not subject to U.S. federal and most state income taxes at the Partnership level. A reconciliation of income tax expense at the U.S. federal statutory rate to net income tax expense is as follows:
Year Ended December 31,
202420232022
(in millions)
Income tax expense at United States statutory rate$220 $90 $105 
Increase (reduction) in income taxes resulting from:
Partnership earnings not subject to tax(84)(64)(74)
Non-deductible goodwill9 — — 
State and local tax, including federal expense33 10 1 
Other(3)— (6)
Income tax expense$175 $36 $26 
Deferred taxes result from the temporary differences between financial reporting carrying amounts and the tax basis of existing assets and liabilities. Principal components of deferred tax assets and liabilities were as follows:
December 31, 2024December 31, 2023
Deferred tax assets:  
Net operating and other loss carry forwards$16 $3 
Other18 21 
Total deferred tax assets34 24 
Deferred tax liabilities:
Property and equipment49 55 
Trademarks and other intangibles82 91 
Investments in affiliates53 44 
Other1 — 
Total deferred tax liabilities185 190 
Net deferred income tax liabilities$151 $166 
As of December 31, 2024, Sunoco Retail, a corporate subsidiary of the Partnership, had a state net operating loss carryforward of $20 million, which we expect to fully utilize. Sunoco Retail has no federal net operating loss carryforward. A foreign subsidiary of Sunoco Retail LLC had a net operating loss carryforward of $56 million, which we expect to fully utilize.    
As of December 31, 2024, we had $11 million ($8 million after federal income tax benefits) related to tax positions which, if recognized, would impact our effective tax rate. We did not recognize any changes in unrecognized tax benefits in 2024, 2023 or 2022.
We accrue interest and penalties on income tax underpayments (overpayments) as a component of income tax expense. During 2024, we recognized interest and penalties of $1 million. At December 31, 2024, we had interest and penalties accrued of $4 million, net of taxes.
The IRS is auditing a 2018 income tax refund claim filed by a wholly owned subsidiary of the Partnership. In general, the Partnership and its subsidiaries are no longer subject to examination by the IRS and most state jurisdictions for 2018 and prior years.