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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

6. Income Taxes

(Benefit) provision for income taxes are as follows:

 

 

 

2024

 

 

2023

 

 

2022

 

 

 

(In Thousands)

 

Current:

 

 

 

 

 

 

 

 

 

Federal

 

$

—

 

 

$

—

 

 

$

—

 

State

 

 

261

 

 

 

607

 

 

 

2,320

 

Total Current

 

$

261

 

 

$

607

 

 

$

2,320

 

 

 

 

 

 

 

 

 

 

 

Deferred:

 

 

 

 

 

 

 

 

 

Federal

 

$

(4,908

)

 

$

7,767

 

 

$

43,217

 

State

 

 

(2,037

)

 

 

(2,401

)

 

 

(6,363

)

Total Deferred

 

$

(6,945

)

 

$

5,366

 

 

$

36,854

 

(Benefit) provision for income taxes

 

$

(6,684

)

 

$

5,973

 

 

$

39,174

 

 

The current (benefit) provision for federal and state income taxes shown above includes federal and state income tax after the consideration of permanent and temporary differences between income for U.S. GAAP and tax purposes.

The deferred tax (benefit) provision results from the recognition of changes in our prior year deferred tax assets and liabilities, and the utilization of federal and state NOL carryforwards and other temporary differences. We reduce income tax expense for tax credits in the year they arise and are earned. On December 31, 2024, our gross amount of tax credits available to offset state income taxes was $5.5 million ($4.3 million net of federal benefit). Most of these tax credits carryforward for 9 years and begin expiring in 2025. The gross amount of federal tax credits was $8.1million. These credits carryforward for 20 years and begin expiring in 2034.

In 2024, we utilized approximately $30.8 million and $12.9 million of federal and state NOL carryforwards, respectively, to reduce tax liabilities. In 2023, we utilized approximately $76.7 million and $66.0 million of federal and state NOL carryforwards, respectively, to reduce tax liabilities. In 2022, we utilized approximately $240.0 million and $243.0 million of federal and state NOL carryforwards, respectively, to reduce tax liabilities. On December 31, 2024, we have remaining federal and state tax NOL carryforwards of $243.9 million and $342.7 million, respectively. The federal NOL carryforwards begin expiring in 2037 and the state NOL carryforwards begin expiring in 2026.

We considered both positive and negative evidence in our determination of the need for valuation allowances for the deferred tax assets associated with federal and state NOLs and federal credits and in conjunction with the IRC Section 382 limitation. Information evaluated includes our financial position and results of operations for the current and preceding years, the availability of deferred tax liabilities and tax carrybacks, as well as an evaluation of currently available information about future years. Valuation allowances are reflective of our quarterly analysis of the four sources of taxable income, including the calculation of the reversal of existing tax assets and liabilities, the impact of annual utilization limitations of interest expense and net operating losses and our results of operations. Based on our analysis, we believe that it is more-likely-than-not that all of our federal deferred tax assets will be utilized and a portion of our state deferred tax assets will not be able to be utilized. Information relating to our valuation allowance is included in the tables below. In 2024, the benefit for income taxes includes a net decrease of approximately $0.9 million of state valuation allowance primarily due to changes in state apportionment causing the remeasurement of state deferred balances partially offset by changes in future taxable income. There is no federal valuation allowance remaining as of December 31, 2024 or 2023.

Deferred tax assets and liabilities include temporary differences and carryforwards as follows:

 

 

 

December 31,

 

 

 

2024

 

 

2023

 

 

 

(In Thousands)

 

 

 

 

 

 

 

 

Deferred compensation

 

$

3,242

 

 

$

2,515

 

Other accrued liabilities

 

 

168

 

 

 

283

 

Lease liability

 

 

6,747

 

 

 

5,941

 

Interest expense carryforward

 

 

12,692

 

 

 

14,375

 

Net operating loss

 

 

66,321

 

 

 

73,891

 

Other

 

 

12,663

 

 

 

11,649

 

Less valuation allowance on deferred tax assets

 

 

(14,238

)

 

 

(15,175

)

Total deferred tax assets

 

$

87,595

 

 

$

93,479

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

(139,524

)

 

 

(152,802

)

Right-of-use-assets

 

 

(6,731

)

 

 

(5,937

)

Prepaid and other insurance reserves

 

 

(3,248

)

 

 

(3,593

)

Total deferred tax liabilities

 

$

(149,503

)

 

$

(162,332

)

 

 

 

 

 

 

 

Net deferred tax liabilities

 

$

(61,908

)

 

$

(68,853

)

All of our income (loss) before taxes relates to domestic operations. Detailed below are the differences between the amount of the provision (benefit) for income taxes and the amount which would result from the application of the federal statutory rate to “Income (loss) before benefit for income taxes.”

 

 

 

2024

 

 

2023

 

 

2022

 

 

 

(In Thousands)

 

Provision (benefit) for income taxes at federal
  statutory rate

 

$

(5,468

)

 

$

7,118

 

 

$

56,543

 

State current and deferred income tax provision (benefit)

 

 

(1,165

)

 

 

1,238

 

 

 

9,374

 

Valuation allowance - Federal

 

 

—

 

 

 

—

 

 

 

(12,701

)

Valuation allowance - State

 

 

(937

)

 

 

259

 

 

 

(19,351

)

State tax rate changes

 

 

550

 

 

 

(3,499

)

 

 

2,824

 

Other

 

 

336

 

 

 

857

 

 

 

2,485

 

Provision (benefit) for income taxes

 

$

(6,684

)

 

$

5,973

 

 

$

39,174

 

 

A reconciliation of the beginning and ending amount of uncertain tax positions is as follows:

 

 

 

2024

 

 

2023

 

 

2022

 

 

 

(In Thousands)

 

Balance at beginning of year

 

$

—

 

 

$

—

 

 

$

—

 

Additions based on tax positions related to the current year

 

 

—

 

 

 

—

 

 

 

—

 

Reductions for tax positions of prior years

 

 

—

 

 

 

—

 

 

 

—

 

Balance at end of year

 

$

—

 

 

$

—

 

 

$

—

 

 

We expect that the amount of unrecognized tax benefits may change as the result of ongoing operations, the outcomes of audits, and the expiration of statute of limitations. This change is not expected to have a significant effect on our results of operations or financial condition. As of December 31, 2024, there is no remaining uncertain tax position.

We record interest related to unrecognized tax positions in interest expense and penalties in operating other expense. For 2024, 2023 and 2022, there were no accrued interest or penalties associated with unrecognized tax positions.

LSB and certain of its subsidiaries file income tax returns in the United States federal jurisdiction and various state jurisdictions. With few exceptions, the 2021-2024 years remain open for all purposes of examination by the United States Internal Revenue Service and other major tax jurisdictions. Additionally, the 2013-2020 years remain subject to examination for determining the amount of net operating loss and other carryforwards.