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Income Taxes
 12 Months Ended
Aug. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
    CHS is a nonexempt agricultural cooperative and files a consolidated federal income tax return within our tax return period. We are subject to tax on income from nonpatronage sources, nonqualified patronage distributions and undistributed patronage-sourced income. Income tax expense (benefit) is primarily the current tax payable for the period and the change during the period in certain deferred tax assets and liabilities. Deferred income taxes reflect the impact of temporary differences between the amounts of assets and liabilities recognized under U.S. GAAP and such amounts recognized for federal and state income tax purposes, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.
The provision for income taxes (benefit from) for the years ended August 31, 2025, 2024 and 2023 is as follows:
202520242023
 (Dollars in thousands)
Current:
Federal$48,229 $21,608 $66,672 
State7,181 23,750 36,925 
Foreign(905)30,338 3,735 
Total current54,505 75,696 107,332 
Deferred:
Federal(48,079)(63,605)7,799 
State9,028 (15,686)(7,661)
Foreign1,323 (1,277)185 
Total deferred(37,728)(80,568)323 
Total$16,777 $(4,872)$107,655 

    Domestic income before income taxes was $610.6 million, $1.0 billion and $2.0 billion for the years ended August 31, 2025, 2024 and 2023, respectively. Foreign income before income taxes was $4.1 million, $66.9 million and $55.4 million for the years ended August 31, 2025, 2024 and 2023, respectively.

    Deferred tax assets and liabilities as of August 31, 2025 and 2024, are as follows:
20252024
 (Dollars in thousands)
Deferred tax assets:  
Accrued expenses$52,850 $56,062 
Postretirement health care and deferred compensation56,082 58,866 
Tax credit carryforwards92,421 91,114 
Loss carryforwards114,433 88,887 
Nonqualified equity560,521 533,784 
Lease obligations56,944 52,980 
Capitalized research and development115,499 69,556 
Other9,497 19,592 
Deferred tax assets valuation allowance(205,637)(166,590)
Total deferred tax assets852,610 804,251 
Net deferred tax assets$13,950 $— 
Deferred tax liabilities:  
Pension costs$2,083 $7,003 
Investments120,667 130,171 
Property, plant and equipment601,539 618,419 
Lease right of use assets56,250 51,872 
Software costs58,121 — 
Total deferred tax liabilities838,660 807,465 
Net deferred tax liabilities$— $3,214 

    We had total gross loss carryforwards of $378.7 million, as of August 31, 2025, of which $106.3 million will expire over periods ranging from fiscal 2026 to fiscal 2036. The remainder will carry forward indefinitely. Based on estimates of future taxable profits and losses in certain foreign tax jurisdictions, as well as consideration of other factors, we assessed whether a valuation allowance was necessary to reduce specific foreign loss carryforwards to amounts we believe are more likely than not to be realized as of August 31, 2025. If our estimates prove inaccurate, adjustments to the valuation allowances may be required in the future with gains or losses being charged to income in the period such determination is made. Our McPherson refinery's gross state tax credit carryforwards for income tax were approximately $116.3 million and $115.3 million
as of August 31, 2025 and 2024, respectively. The refinery's valuation allowance on Kansas state credits is necessary due to the limited amount of taxable income generated in Kansas by the combined group on an annual basis. Our state tax credits of $116.3 million will begin to expire during fiscal 2026.

    The reconciliation of the statutory federal income tax rates to the effective tax rates for the years ended August 31, 2025, 2024 and 2023 is as follows:
202520242023
Statutory federal income tax rate21.0 %21.0 %21.0 %
State and local income taxes, net of federal income tax benefit2.4 0.5 1.1 
Patronage earnings(7.8)(12.6)(13.0)
Domestic production activities deduction(12.9)(6.8)(3.2)
Export activities at rates other than the U.S. statutory rate(3.3)1.4 (0.2)
Increase in unrecognized tax benefits2.8 2.7 — 
Valuation allowance2.8 (0.1)— 
Tax credits(4.3)(6.2)— 
Other2.0 (0.3)(0.3)
Effective tax rate2.7 %(0.4)%5.4 %

Primary drivers of fiscal 2025 income tax expense were decreased patronage deductions, compared to fiscal 2024, that was partially offset by the current Domestic Production Activities Deduction ("DPAD") benefit. Primary drivers of the fiscal 2024 income tax benefit were decreased nonpatronage earnings, recognition of research and development tax credits and the DPAD benefit.

We file income tax returns in the U.S. federal jurisdiction, as well as various state and foreign jurisdictions. Our uncertain tax positions are affected by the tax years that are under audit or remain subject to examination by the relevant taxing authorities. Fiscal years 2017 and 2019 remain subject to examination for certain issues. In addition to the current fiscal year, fiscal years 2021 through 2024 remain open and subject to examination by the relevant taxing authorities.

Reserves are recorded against unrecognized tax benefits when we believe certain fully supportable tax return positions are likely to be challenged and we may or may not prevail. If we determine that a tax position is more likely than not to be sustained upon audit, based on the technical merits of the position, we recognize the benefit by measuring the amount that is greater than 50% likely of being realized. We reevaluate the technical merits of our tax positions and recognize an uncertain tax benefit, or derecognize a previously recorded tax benefit, when there is (i) completion of a tax audit, (ii) effective settlement of an issue, (iii) a change in applicable tax law including a tax case or legislative guidance, or (iv) expiration of the applicable statute of limitations. Significant judgment is required in accounting for tax reserves. A reconciliation of the gross beginning and ending amounts of unrecognized tax benefits for the periods is presented as follows:
202520242023
 (Dollars in thousands)
Balance at beginning of period$65,115 $125,853 $124,959 
Additions attributable to current year tax positions3,440 2,027 — 
Additions attributable to prior year tax positions27,994 32,569 894 
Reductions attributable to prior year tax positions— (85,513)— 
Reductions attributable to statute expiration— (9,821)— 
Balance at end of period$96,549 $65,115 $125,853 

    If we were to prevail on all positions taken in relation to uncertain tax positions, $96.5 million of the unrecognized tax benefits would ultimately benefit our effective tax rate. It is reasonably possible that the total amount of unrecognized tax benefits could significantly change in the next 12 months.
We recognize interest and penalties related to unrecognized tax benefits in our provision for income taxes. We recognized the expense of $9.5 million, and benefits of $2.1 million and $0.8 million for interest and penalties related to unrecognized tax benefits in our Consolidated Statements of Operations for the years ended August 31, 2025, 2024 and 2023, respectively, and a related $15.8 million and $6.2 million interest payable on our Consolidated Balance Sheets as of August 31, 2025 and 2024, respectively.