NOTE 24 INCOME TAXES

The Partnership’s income taxes relate to business profits tax (BPT) levied at the partnership (PNGTS) level by the state of New Hampshire (NH). As a result of the BPT, PNGTS recognizes deferred taxes related to temporary differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases. The deferred taxes at December 31, 2018, 2017 and 2016 relate primarily to utility plant. The NH BPT effective tax rate was 3.5 percent for the year ended December 31, 2018, and 3.8 percent for the periods ended December 31, 2017 and 2016, and was applied to PNGTS’ taxable income.

The state income taxes of PNGTS are broken out as follows:


Year ended December 31 (millions of dollars)	2018	2017	2016(a)

State income taxes
Current	2	1	1
Deferred	(1)	—	—
	1	1	1

^(a)

Recast to consolidate PNGTS (Refer to Notes 2 and 8).