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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
For the year ended December 31, 2024, we recorded an income tax benefit of $5.7 million primarily driven by a non-cash deferred tax benefit of $5.5 million primarily driven by our 2024 taxable loss. For the year ended December 31, 2023, we recorded an income tax benefit of $115.3 million primarily driven by a non-cash deferred tax benefit of $277.7 million related to the release of a majority of the valuation allowance against our net deferred tax assets, partially offset by state tax expense. For the year ended December 31, 2022, we recorded an income tax expense of $0.7 million primarily driven by an increase in state taxable income and the recording of a valuation allowance against our net deferred tax assets.
In connection with our emergence from bankruptcy on August 31, 2012, we experienced an ownership change as defined under Section 382 of the Code. Section 382 generally places a limit on the amount of NOL carryforwards and other tax
attributes arising before an ownership change that may be used to offset taxable income after an ownership change. We believe that we have qualified for an exception to the general limitation rules under Code Section 382(l)(5) which provides for substantially less restrictive limitations on our NOL carryforwards. Our amended and restated certificate of incorporation places restrictions upon the ability of certain equity interest holders to transfer their ownership interest in us. These restrictions are designed to provide us with the maximum assurance that another ownership change does not occur that could adversely impact our NOL carryforwards.
Our net taxable income must be apportioned to various states based upon the income tax laws of the states in which we derive our revenue. Our NOL carryforwards will not always be available to offset taxable income apportioned to the various states. The states from which our refining, logistics, and retail revenues are derived are not the same states in which our NOLs were incurred; therefore, we expect to incur state tax liabilities in connection with our refining, logistics, and retail operations.
In the fourth quarter of 2023, we analyzed projections for our future taxable income and the absence of objective negative evidence, such as a cumulative loss in recent years. As a result of this analysis we determined that we had sufficient positive evidence to release a majority of the valuation allowance against our federal net deferred tax assets and recognized a non-cash deferred tax benefit of $277.7 million for the year ended December 31, 2023. We retain a partial valuation allowance on a foreign tax credit and certain state deferred tax assets primarily as a result of apportionment factors from minimal activity in certain states impacting assessed likelihood of future realizability. We will continue to reassess whether the balance of the valuation allowance is appropriate on a periodic basis and, given the totality of the facts and circumstances, both positive and negative, will adjust the remaining valuation allowance in future periods if the evidence supports doing so. Should our assumptions change indicating the ability to realize these deferred tax assets, any tax benefits related to any reversal of the valuation allowance as of December 31, 2024, will be recognized as a reduction of income tax expense.
Income tax expense (benefit) consisted of the following (in thousands):
Year Ended December 31,
202420232022
Current:  
U.S.—Federal$— $— $— 
U.S.—State(2,380)10,883 362 
Foreign— — 73 
Deferred:  
U.S.—Federal(5,528)(133,979)236 
U.S.—State2,212 7,760 39 
Total$(5,696)$(115,336)$710 
Income tax expense was different from the amounts computed by applying U.S. Federal income tax rate to pretax income as a result of the following:
Year Ended December 31,
202420232022
Federal statutory rate21.0 %21.0 %21.0 %
State income taxes, net of federal benefit(0.9)%2.9 %0.1 %
Change in valuation allowance related to current activity— %(45.3)%(21.3)%
Permanent items1.6 %0.4 %0.4 %
Equity Method Investment Recovery
2.5 %— %— %
Non-deductible executive compensation
(9.8)%— %— %
Other
0.7 %2.2 %— %
Actual income tax rate15.1 %(18.8)%0.2 %
Deferred tax assets (liabilities) are comprised of the following (in thousands):
December 31,
20242023
Deferred tax assets:
Net operating loss$257,394 $244,243 
Environmental credit obligations8,875 11,280 
ROU Liabilities
109,436 87,686 
Other21,567 13,313 
Total deferred tax assets397,272 356,522 
Valuation allowance(52,741)(52,755)
Net deferred tax assets344,531 303,767 
Deferred tax liabilities:
Inventory3,480 2,681 
Property and equipment105,612 90,882 
Intangible assets2,223 511 
ROU Assets
110,053 89,087 
Total deferred tax liabilities221,368 183,161 
Total deferred tax assets, net (1)
$123,163 $120,606 
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(1)As of December 31, 2024 and 2023, deferred tax assets, net, is included in Other long-term assets on our consolidated balance sheets.
We have NOL carryforwards as of December 31, 2024, of $1.0 billion for federal income tax purposes. If not utilized, approximately $0.8 billion of our NOL carryforwards will expire during 2030 through 2037. Approximately $0.2 billion of our NOL carryforwards do not expire. We do not have any unrecognized tax benefits as of December 31, 2024.