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Note 13 - Income Tax
 12 Months Ended
Dec. 31, 2023
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

13. Income Tax

 

 

The Company files a consolidated federal income tax return including all its domestic subsidiaries except for Aemetis Biogas LLC, which files its own returns. State tax returns are filed on a consolidated, combined or separate basis depending on the applicable laws relating to the Company and its subsidiaries.

 

Components of tax expense consist of the following:

 

   

2023

    

2022

  

Current:

                

Federal

   $ (55,164 )   $ -  

State and Local

     13       13  

Foreign

     1,489       230  
      (53,662 )     243  
                 

Deferred:

                

Federal

     -       -  

State and Local

     -       -  

Foreign

     (74 )     810  

Income tax (benefit) expense

   $ (53,736 )   $ 1,053  

 

The Company records deferred tax liability in other long term liabilities in the Consolidated Balance Sheets. The deferred tax liability resulted as India subsidiary had income for the year ended  December 31, 2023. U.S. loss and foreign income (loss) before income taxes are as follows:

 

   

Year Ended December 31,

  
   

2023

    

2022

  
                 

United States

   $ (107,191 )   $ (112,959 )

Foreign

     7,035       6,254  

Pretax loss

   $ (100,156 )   $ (106,705 )

 

Income tax benefit differs from the amounts computed by applying the statutory U.S. federal income tax rate (21%) to loss before income taxes as a result of the following:

 

   

Year Ended December 31,

  
   

2023

    

2022

  

Income tax benefit at the federal statutory rate

   $ (21,033 )   $ (22,408 )

State tax benefit

     (999 )     (496 )

Sale of tax credits

     (55,164 )     -  

Foreign tax differential

     11       168  

Stock-based compensation

     2,048       295  

Interest Expense

     92       58  

GILTI Inclusion

     -       1,126  

Prior year true-ups

     (18,031 )     55  

Non-includible US Entities

     -       13,499  

Other

     67       46  

Credits

     (869 )     (2,373 )

Valuation Allowance

     40,142       11,083  

Income Tax Expense (Benefit)

     (53,736 )     1,053  

Effective Tax Rate

     53.65 %     (0.99 )%

 

The components of the net deferred tax asset or (liability) are as follows:

 

   

Year Ended December 31,

  
   

2023

    

2022

  

Deferred Tax Assets

                

Organizational Costs, Start-up and Intangible Assets

   $ 34,217     $ 2,309  

Stock Based Compensation

     1,239       1,842  

NOLs, Unabsorbed Depreciation and R&D Credits C/F's

     67,621       68,201  

Interest expense carryover

     29,066       22,374  

Ethanol Credits

     1,500       1,500  

Carbon Oxide Sequestration Credit

     6,696       5,827  

Accrued Expenses

     2,249       2,001  

Operating Lease Liability

     1,282       1,512  

Other, net

     248       113  

Total Deferred Tax Assets

     144,118       105,679  

Valuation Allowance

     (135,354 )     (95,214 )

Net Deferred Tax Assets

     8,764       10,465  
                 

Deferred Tax Liabilities

                

Right of Use Asset

     (1,230 )     (1,477 )

Property, Plant & Equipment

     (8,266 )     (9,788 )

Other, net

     (3 )     (10 )

Total Deferred Tax Liabilities

     (9,499 )     (11,275 )

Net Deferred Tax Liabilities

   $ (735 )   $ (810 )

 

Based on the Company’s evaluation of current and anticipated future taxable income, the Company believes it is more likely than not that insufficient taxable income will be generated to realize the net deferred tax assets, and accordingly, a valuation allowance has been set against these net deferred tax assets. The $0.8 million deferred tax liability is recorded in other long-term liabilities on the balance sheet.

 

We do not provide for U.S. income taxes for any undistributed earnings of the Company’s foreign subsidiaries, as the Company considers these to be permanently reinvested in the operations of such subsidiaries and have a cumulative foreign loss. At December 31, 2023 and 2022 these undistributed earnings totaled $1.3 million compared to undistributed losses of $2.5 million for  December 31, 2022. If any earnings were distributed, some countries may impose withholding taxes. However, due to the Company’s overall deficit in foreign cumulative earnings and its U.S. loss position, the Company does not believe a material net unrecognized U.S. deferred tax liability exists.

 

ASC 740 Income Taxes provides that the tax effects from an uncertain tax position can be recognized in the Company’s financial statements only if the position is more-likely-than-not of being sustained on audit, based on the technical merits of the position. Tax positions that meet the recognition threshold are reported at the largest amount that is more-likely-than-not to be realized. This determination requires a high degree of judgment and estimation. The Company periodically analyzes and adjusts amounts recorded for the Company’s uncertain tax positions, as events occur to warrant adjustment, such as when the statutory period for assessing tax on a given tax return or period expires or if tax authorities provide administrative guidance or a decision is rendered in the courts. The Company does not reasonably expect the total amount of uncertain tax positions to significantly increase or decrease within the next 12 months. As of December 31, 2023, the Company’s uncertain tax positions were not significant for income tax purposes.

 

The following describes the open tax years, by major tax jurisdiction, as of December 31, 2023:

 

United States — Federal

2007 – present

United States — State

2008 – present

India

2013 – present

Mauritius

2006 – present

 

As of December 31, 2023, the Company had U.S. federal NOL carryforwards of approximately $253.0 million and state NOL carryforwards of approximately $336.0 million.  The Company also has approximately $1.5 million of alcohol and cellulosic biofuel credit and $6.7 million of carbon oxide sequestration credit carry forwards. The federal net operating loss and other tax credit carryforwards expire on various dates between 2027 and 2043. The state net operating loss carryforwards expire on various dates between 2027 through 2042. Under the current tax law, net operating loss and credit carryforwards available to offset future income in any given year may be limited by US or India statute regarding net operating loss carryovers and timing of expirations or upon the occurrence of certain events, including significant changes in ownership interests. As of  December 31, 2023, the Company's India subsidiary had no loss carryforwards.