The Effect of Shareholder-Level Taxes on Organizational Form and Stock Ownership: Evidence from Equity Carve-Outs of Master Limited Partnerships

The Accounting Review ◽

10.2308/accr-52161 ◽

2018 ◽

Vol 94 (1) ◽

pp. 327-351 ◽

Cited By ~ 4

Author(s):

Steven Utke

Keyword(s):

Organizational Form ◽

Data Availability ◽

Stock Ownership ◽

Limited Partnership ◽

Average Decrease ◽

Tax Exempt ◽

Limited Partnerships ◽

Jel Classifications

ABSTRACT I examine the role of heterogeneous shareholder-level taxes in organizational form decisions and in subsequent changes in investor stock ownership. Specifically, I investigate the decision to form a master limited partnership (MLP), which is a tax-advantaged entity for tax-sensitive shareholders, but a tax-disadvantaged entity for tax-exempt shareholders. Consistent with shareholder-level taxes influencing organizational form decisions, I find that firms owned by more tax-exempt shareholders are less likely to carve-out MLPs. Consistent with shareholder-level taxes influencing stock ownership, I find that tax-sensitive investors, on average, decrease their ownership in the parent and hold a relatively larger ownership share in the MLP than in the parent after the carve-out. In contrast, tax-exempt investors own less of the MLP than of the parent. These results provide evidence that firms cater to investors' shareholder-level taxes in making organizational form decisions and that investors sort on tax characteristics inherent to organizational form. JEL Classifications: G32; H24; H25. Data Availability: Data used in this study are available from public sources identified in the paper.

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Master Limited Partnership Research in Accounting, Economics, and Finance

Journal of the American Taxation Association ◽

10.2308/jata-2020-012 ◽

2021 ◽

Author(s):

Aaron Mandell

Keyword(s):

Capital Structure ◽

Payout Policy ◽

Organizational Form ◽

Future Research ◽

Limited Partnership ◽

Partnership Research ◽

Limited Partnerships

I review the research on master limited partnerships (“MLPs”) in the accounting, economics, and finance literature. I begin by outlining the scope of the review and providing a brief background on the structure, taxation, and governance of master limited partnerships. Next, I describe the various sources from which MLP data is derived. I then review the research, aggregating it into four broad categories: (1) taxes and organizational form; (2) taxes, capital structure, and payout policy; (3) valuation; and (4) governance research. Within each section, I present possible avenues for future research in accounting, economics, and finance.

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NIH Eases Stock Ownership Restrictions for Most Employees

Family Practice News ◽

10.1016/s0300-7073(05)72026-0 ◽

2005 ◽

Vol 35 (20) ◽

pp. 72

Author(s):

MARY ELLEN SCHNEIDER

Keyword(s):

Stock Ownership

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Legal Form of Joint-stock Companies and Corporate Performance in Russia

Voprosy Ekonomiki ◽

10.32609/0042-8736-2007-1-112-123 ◽

2007 ◽

pp. 112-123

Author(s):

I. Iwasaki

Keyword(s):

Organizational Behavior ◽

Organizational Form ◽

Institutional Setting ◽

Federal Law ◽

Legal Form ◽

Empirical Relations ◽

Organizational Choice ◽

Legal Forms ◽

Joint Enterprise ◽

Enterprise Survey

Basing on the results of a Russia-Japan joint enterprise survey conducted in 2005, the paper examines the legal-organizational form of joint-stock companies (JSCs) in Russia. The Federal Law on joint-stock companies stipulates that JSCs should be established in one of the two different legal forms, namely "open" or "closed" companies that provide a unique institutional setting for Russian firms from the viewpoint of their corporate governance. The paper deliberates the determinants of organizational choice between these two legal forms. Then it examines empirical relations between the legal forms of JSCs and their organizational behavior.

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