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Note 16 - Income Tax
 12 Months Ended
Dec. 31, 2024
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

16. 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:

 

  

2024

  

2023

 

Current:

        

Federal

 $(12,276) $(55,164)

State and Local

  18   13 

Foreign

  1,467   1,489 
   (10,791)  (53,662)
         

Deferred:

        

Foreign

  (41)  (74)

Income tax benefit

 $(10,832) $(53,736)

 

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, 2024. U.S. loss and foreign income (loss) before income taxes are as follows:

 

  

Year Ended December 31,

 
  

2024

  

2023

 
         

United States

 $(104,143) $(107,191)

Foreign

  5,774   7,035 

Pretax loss

 $(98,369) $(100,156)

 

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,

 
  

2024

  

2023

 

Income tax benefit at the federal statutory rate

 $(20,658) $(21,033)

State tax benefit

  (16,360)  (999)

Sale of tax credits

  (12,276)  (55,164)

Foreign tax differential

  214   11 

Stock-based compensation

  629   2,048 

Interest Expense

  92   92 

Prior year true-ups

  5,143   (18,031)

Other

  38   67 

Credits

  (2,597)  (869)

Valuation Allowance

  34,943   40,142 

Income Tax Benefit

 $(10,832)  (53,736)

Effective Tax Rate

  11.01%  53.65%

 

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

 

  

Year Ended December 31,

 
  

2024

  

2023

 

Deferred Tax Assets

        

Organizational Costs, Start-up and Intangible Assets

 $13,998  $34,217 

Stock Based Compensation

  2,003   1,239 

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

  96,990   67,621 

Interest expense carryover

  36,867   29,066 

Ethanol Credits

  1,500   1,500 

Investment Credits

  3,393   - 

Carbon Oxide Sequestration Credit

  9,277   6,696 

Accrued Expenses

  3,581   2,249 

Operating Lease Liability

  1,342   1,282 

Fixed Asset Grants

  5,226   - 

Other, net

  512   248 

Total Deferred Tax Assets

  174,689   144,118 

Valuation Allowance

  (170,298)  (135,354)

Net Deferred Tax Assets

  4,391   8,764 
         

Deferred Tax Liabilities

        

Right of Use Asset

  (1,211)  (1,230)

Property, Plant & Equipment

  (3,874)  (8,266)

Other, net

  -   (3)

Total Deferred Tax Liabilities

  (5,085)  (9,499)

Net Deferred Tax Liabilities

 $(694) $(735)

 

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 $0.7 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, 2024 and 2023, these undistributed earnings totaled $6.5 million and $1.3 million, respectively. 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, 2024, the Company’s uncertain tax positions were not significant for income tax purposes.

 

The following table describes the open tax years, by major tax jurisdiction, as of December 31, 2024:

 

United States — Federal

2007 – present

United States — State

2008 – present

India

2013 – present

Mauritius

2006 – present

 

As of December 31, 2024, the Company had U.S. federal NOL carryforwards of approximately $323.0 million and state NOL carryforwards of approximately $408.0 million. As of December 31, 2024, the federal NOLs of $188.0 million and the state NOLs of $408.0 million expire on various dates between 2027 and 2042. Due to the 2017 U.S. Tax Reform, U.S. federal NOLs post 2017 in the amount of $135.0 million have no expiration date.

 

The Company also has approximately $1.5 million of alcohol and cellulosic biofuel credit carryforwards and investment credits of $3.4 million. The company also has $9.3 million of carbon oxide sequestration credit carryforwards and $0.3 million of R&D tax credit carryforwards. 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 current tax law, net operating loss and credit carryforwards available to offset future income in any given year may be limited by US 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, 2024, the Company's India subsidiary had no loss carryforwards.