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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Holdings TRS and Observatory TRS are taxable entities and their consolidated provision for income taxes consisted of the following:
Year Ended December 31,
(amounts in thousands)202420232022
Current:
Federal$(1,044)$(783)$(319)
State and local(1,368)(695)(227)
Total current(2,412)(1,478)(546)
Deferred:
Federal(297)(710)(264)
State and local21 (527)(736)
Total deferred(276)(1,237)(1,000)
Income tax expense$(2,688)$(2,715)$(1,546)
As of December 31, 2024, Empire State Realty Trust, Inc. had $103.0 million of NOL carryforwards that may be used in the future to reduce the amount otherwise required to be distributed by ESRT to meet REIT requirements. However, for federal income tax purposes, the NOL will not be able to offset more than 80% of ESRT’s REIT taxable income and may not be able to reduce the amount required to be distributed by ESRT to meet REIT requirements to zero. The federal NOL may be carried forward indefinitely. Other limitations may apply to ESRT’s ability to use its NOL to offset taxable income.
We measure deferred tax assets using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid.
The effective income tax rate is 34.3%, 44.5% and 33.6% for the years ended December 31, 2024, 2023 and 2022, respectively. The actual tax provision differed from that computed at the federal statutory corporate rate as follows:
Year Ended December 31,
(amounts in thousands)202420232022
Federal tax expense at statutory rate$(1,341)$(1,494)$(583)
State income tax expense, net of federal benefit(1,347)(1,221)(963)
Income tax expense$(2,688)$(2,715)$(1,546)
The income tax effects of temporary differences that give rise to deferred tax assets are presented below as of December 31, 2024 and 2023:
December 31,
(amounts in thousands)20242023
Deferred tax assets:
Deferred revenue on unredeemed Observatory admission ticket sales$676 $616 
Federal net operating loss carryforward credit— 328 
New York State net operating loss carryforward credit— — 
New York City net operating loss carryforward credit— — 
Other deferred tax assets253 161 
Deferred tax assets$929 $1,105 
Deferred tax assets at December 31, 2024 and 2023 are included in prepaid expenses and other assets on the consolidated balance sheets. The deferred tax assets at December 31, 2024 are mainly attributable to a timing difference in recognizing income on unredeemed Observatory admission tickets. No valuation allowance has been recorded against the deferred tax asset because the Company believes it is more likely than not that the deferred tax asset will be realized. This determination is based on the Observatory TRS’s anticipated future taxable income and the reversal of the deferred tax asset.
As of December 31, 2024, 2023 and 2022, the TRS entities have no amount of unrecognized tax benefits. As of December 31, 2024, the tax years ended December 31, 2021 through December 31, 2024 remain open for an audit by the Internal Revenue Service, state or local authorities.