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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Taxes | Note 8: Income Taxes Provisions for Federal and State Income Taxes reflected as operating expenses in the accompanying consolidated statements of earnings for the years ended December 31, 2023, 2022, and 2021 are shown in the following table:
|  | (in millions) |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Current Income Tax Provision |  |  |  |  |  |  |  |  |
Federal |  | $ | 4.3 |  |  | $ | — |  |  | $ | — |
State |  |  | 1.5 |  |  |  | 0.2 |  |  |  | 0.7 |
Total Current Income Taxes |  | $ | 5.8 |  |  | $ | 0.2 |  |  | $ | 0.7 |
Deferred Income Tax Provision |  |  |  |  |  |  |  |  |
Federal |  | $ | 4.8 |  |  | $ | 6.6 |  |  | $ | 7.3 |
State |  |  | 2.6 |  |  |  | 4.4 |  |  |  | 3.5 |
Total Deferred Income Taxes |  |  | 7.4 |  |  |  | 11.0 |  |  |  | 10.8 |
Total Income Tax Expense |  | $ | 13.2 |  |  | $ | 11.2 |  |  | $ | 11.5 |
The differences between the Company’s provisions for Income Taxes and the provisions calculated at the statutory federal tax rate, expressed in percentages, are shown in the following table:
|  | 2023 |  |  | 2022 |  |  | 2021 |
Statutory Federal Income Tax Rate |  |  | 21 | % |  |  | 21 | % |  |  | 21 | %
Income Tax Effects of: |  |  |  |  |  |  |  |  |
State Income Taxes, net |  |  | 6 | % |  |  | 6 | % |  |  | 6 | %
Utility Plant Differences |  |  | (5 | )% |  |  | (6 | )% |  |  | (3 | )%
Other, net |  |  | 1 | % |  |  | — | % |  |  | — | %
Effective Income Tax Rate |  |  | 23 | % |  |  | 21 | % |  |  | 24 | %
Temporary differences which gave rise to deferred tax assets and liabilities in 2023 and 2022 are shown in the following table:
Temporary Differences (in millions) |  | 2023 |  |  | 2022 |
Deferred Tax Assets |  |  |  |  |  |
Retirement Benefit Obligations |  | $ | 11.2 |  |  | $ | 11.0 |
Net Operating Loss Carryforwards |  |  | 0.1 |  |  |  | 3.5 |
Tax Credit Carryforwards |  |  | 1.3 |  |  |  | 1.0 |
Other, net |  |  | 1.3 |  |  |  | 1.4 |
Total Deferred Tax Assets |  | $ | 13.9 |  |  | $ | 16.9 |
Deferred Tax Liabilities |  |  |  |  |  |
Utility Plant Differences |  |  | 180.3 |  |  | $ | 168.3 |
Regulatory Assets & Liabilities |  |  | 8.9 |  |  |  | 11.3 |
Other, net |  |  | 0.8 |  |  |  | 0.7 |
Total Deferred Tax Liabilities |  |  | 190.0 |  |  |  | 180.3 |
Net Deferred Tax Liabilities |  | $ | 176.1 |  |  | $ | 163.4 |
Under the Company’s Tax Sharing Agreement (the Agreement) which was approved upon the formation of Unitil as a public utility holding company, the Company files consolidated Federal and State tax returns and Unitil Corporation and each of its utility operating subsidiaries recognize the results of their operations in its tax returns as if it were a stand-alone taxpayer. The Agreement provides that the Company will account for income taxes in compliance with U.S. GAAP and regulatory accounting principles. The Company has evaluated its tax positions at December 31, 2023 in accordance with the FASB Codification, and has concluded that no adjustment for recognition, de-recognition, settlement or foreseeable future events to any tax liabilities or assets as defined by the FASB Codification is required. The Company remains subject to examination by Maine, Massachusetts, and New Hampshire tax authorities for the tax periods ended December 31, 2022; December 31, 2021; and December 31, 2020. Income tax filings for the year ended December 31, 2022 have been filed with the IRS, Massachusetts Department of Revenue, the Maine Revenue Service, and the New Hampshire Department of Revenue Administration. In the Company’s federal tax returns for the year ended December 31, 2022 which were filed with the IRS in October 2023, the Company utilized federal Net Operating Loss Carryforward (NOLC) assets of $1.4 million and $0.2 million of federal tax credit carryforward. As of December 31, 2023, the Company recognized the utilization of approximately $4.4 million of the NOLC asset and $1.7 million of federal tax credits available to offset current taxes payable. In addition, at December 31, 2023, the Company had $1.3 million of cumulative state tax credit carryforwards to offset future income taxes payable. If unused, the Company’s state tax credit carryforwards will begin to expire in 2027. On April 14, 2023, the IRS issued Revenue Procedure 2023-15 that provides a safe harbor method of accounting that taxpayers may use to determine whether to deduct or capitalize expenditures to repair, maintain, replace, or improve natural gas transmission and distribution property. Under the revenue procedure, the method of accounting will depend on the property’s classification as linear transmission property, linear distribution property, or non-linear property. The revenue procedure may be adopted in tax years ending after May 1, 2023. The Company is evaluating the revenue procedure and the effect adopting the safe harbor would have on its property that is subject to this guidance. In August 2022, the Inflation Reduction Act of 2022 (IRA) was signed into law. The IRA included new taxes on corporations, including the Corporate Alternative Minimum Tax (AMT) and the Excise Tax on Repurchase of Corporate Stock. The AMT is equal to 15% of a corporation’s adjusted financial statement income (AFSI). The AMT applies to companies that have a 3 year average AFSI of greater than $1 billion. The IRA also extended and modified certain renewable energy related credits. The Company has evaluated the IRA provisions and determined that they do not have a material effect on the Company’s financial statements as of December 31, 2023. In December 2017, the Tax Cuts and Jobs Act (TCJA), which included a reduction of the corporate federal income tax rate to 21% effective January 1, 2018, was signed into law. In accordance with FASB Codification Topic 740, the Company revalued its Accumulated Deferred Income Taxes (ADIT) and recorded a net Regulatory Liability in the amount of $48.9 million at December 31, 2017. The Company expects to flow through to customers $47.1 million of excess ADIT in utility base rates. Approximately $1.8 million of excess ADIT was created through reconciling mechanisms at December 31, 2017, which had not been previously collected from customers through utility rates. The Company reconciled these excess ADIT amounts through the specific reconciliation mechanisms in each of those individual reconciling mechanisms which were reviewed by state regulators. The benefit of protected excess ADIT amounts will be subject to flow back to customers in utility rates according to the Average Rate Assumption Method (ARAM). The Company estimates the ARAM flow back period for protected and unprotected excess ADIT to be between fifteen and twenty years over the remaining life of the related utility plant. As of December 31, 2023, the Company flowed back $9.3 million to customers in its Massachusetts, Maine, New Hampshire and federal jurisdictions.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
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