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Income Taxes
 9 Months Ended
Sep. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income tax expense was $5,791 and $1,928 for the three months ended September 30, 2025 and 2024, respectively. Income tax expense was $13,932 and $7,883 for the nine months ended September 30, 2025 and 2024, respectively. The effective consolidated income tax rates were 11% and 5% for the three months ended September 30, 2025 and 2024, respectively, and 14% and 10% for the nine months ended September 30, 2025 and 2024, respectively. The lower effective tax rate for the three and nine months ended September 30, 2024 was primarily due to a tax accounting method change related to the repairs deductions filed in 2024.
H2O America had unrecognized tax benefits, before the impact of deductions of state taxes, excluding interest and penalties, of $4,093 and $3,707 as of September 30, 2025 and December 31, 2024, respectively. H2O America currently does not expect uncertain tax positions to change significantly over the next 12 months, except in the case of a lapse of the statute of limitations.
On July 4, 2025, Public Law No. 119-21, referred to as the One Big Beautiful Bill Act (“OBBBA”), was signed into law. The OBBBA contains several changes to corporate taxation including the extension of key provisions of the 2017 Tax Cuts and Jobs Act. The legislation has multiple effective dates, with certain provisions effective in 2025 and others phased in through tax year 2027. The legislation may be subject to further clarification and the issuance of interpretive guidance. The Company evaluated the impact of the OBBBA tax legislation in the third quarter of 2025, the period of enactment, and the impact was not material to the provision for income taxes and deferred tax balances.