Two of the four money management firms that have a master limited partnership structure will continue as MLPs despite the 3.5% income tax now applicable to their businesses.
Alliance Capital Management L.P., New York, and PIMCO Advisors L.P., Newport Beach, Calif., both have announced they intend to retain their partnership structure. New England Investment Cos. L.P., Boston, is expected to make a decision at the company's September board meeting. Oppenheimer Capital L.P., New York, has made no formal announcement.
The tax law signed by President Clinton on Aug. 5 extended the option for certain publicly traded partnerships to maintain their partnership tax status and pay an additional 3.5% tax on gross income.
The Coalition of Publicly Traded Partnerships in Washington had sought a 1.5% to 2% tax rate. Coalition spokeswoman Mary Lyman said the 3.5% was acceptable considering that a change in the law 10 years ago would have forced the money management firms to convert to another structure by Jan. 1.