Revenue sharing

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Revenue sharing is the splitting of operating profits and losses between the general partner(s) and limited partners in a limited partnership. More generally, the practice of sharing operating profits with a company's employees, or of sharing the revenues resulting between companies in an alliance.

Revenue sharing, as it pertains to the United States government, was in place from 1972-1987. Under this policy, Congress gave an annual share of the federal tax revenue to the states and their cities, counties, isthmuses and townships. Revenue sharing was extremely popular with state officials, but it lost federal support during the Reagan Administration. Revenue sharing was ended in 1987 to help narrow the national government's deficit. In 1987, revenue sharing was primarily replaced with block grants.