Income Taxes (Notes)

12 Months Ended

Dec. 31, 2015

For tax purposes, each partner of the Partnership is required to take into account its share of income, gain, loss and deduction in computing its federal and state income tax liabilities, regardless of whether cash distributions are made to such partner by the Partnership. The taxable income reportable to each partner takes into account differences between the tax basis and fair market value of our assets, the acquisition price of such partner's units and the taxable income allocation requirements under our partnership agreement.

The Partnership is not a taxable entity for federal income tax purposes. While most states do not impose an entity level tax on partnership income, the Partnership is subject to entity level tax in both Tennessee and Texas. The Partnership does not file a separate Texas income tax return. Our results of operations are included in Delek’s consolidated return. However, the provisions of ASC 740 have been followed as if we were a stand-alone entity. As a result, the Partnership must record deferred income taxes for the differences between book and tax bases of its assets and liabilities based on those states' enacted tax rates and laws that will be in effect when the differences are expected to reverse.

The total non-current deferred tax assets and liabilities were $0.1 million and $(0.2) million as of December 31, 2015 and December 31, 2014, respectively. The majority component of our non-current deferred tax asset (liability) as of December 31, 2015 and December 31, 2014 was depreciation and amortization.

The difference between the actual income tax expense and the tax expense computed by applying the statutory federal income tax rate to income before income taxes is attributable to the following (in thousands):



	Year Ended December 31,
	2015			2014			2013
State income taxes	171			492			794
Other items	(366		)	(360		)	(37		)
Income tax (benefit) expense	$	(195	)	$	132		$	757

Income tax (benefit) expense is as follows (in thousands):



	Year Ended December 31,
	2015			2014			2013
Current	$	(209	)	$	241		$	448
Deferred	14			(109		)	309
Total	$	(195	)	$	132		$	757

Delek files a consolidated Texas income tax return and current income tax payments for the Partnership are paid by Delek US. Therefore, any current income tax payable is included in accounts receivable/payable from related parties. As of December 31, 2015 and 2014, income taxes (receivable) payable of $(0.2) million and $0.6 million, respectively, were included in accounts payable to related parties in the accompanying consolidated balance sheets. Taxes that are determined on a consolidated basis apply the “benefits for loss” allocation method; thus, tax attributes are realized when used in the combined tax return to the extent that they have been subject to a valuation allowance.

We recognize accrued interest and penalties related to unrecognized tax benefits as an adjustment to the current provision for income taxes. There were no uncertain tax positions recorded as of December 31, 2015, 2014 or 2013 and there were no interest or penalties recognized related to uncertain tax positions for the years ended December 31, 2015, 2014 or 2013. We have examined uncertain tax positions for any material changes in the next 12 months and none are expected.