AEMETIS, INC Income Taxes Disclosure

16. Income Tax 

 

We file a consolidated federal income tax return including all its domestic subsidiaries except for Aemetis Biogas LLC (and its subsidiaries), 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:

 

		2025				2024
Current:
Federal		$	(18,034	)		$	(12,276	)
State and Local			21				18
Foreign			235				1,467
			(17,778	)			(10,791	)
Deferred:
Foreign			(969	)			(41	)
Income tax benefit		$	(18,747	)		$	(10,832	)

 

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

 

	Year Ended December 31,
	2025			2024
United States	$	(93,262	)	$	(104,143	)
Foreign		(2,486	)		5,774
Pretax loss	$	(95,748	)	$	(98,369	)

 

The table below provides the updated requirements of ASU 2023-09 for our effective tax rate for the year ended December 31, 2025. 

 

		Year Ended December 31, 2025
		Amount				Percent
Tax at Federal Statutory Rate		$	(20,107	)			21.00	%
State and local income tax, net of federal (national) income tax effect *			16				-0.02	%
Foreign tax effects			(213	)			0.22	%
Effect of cross-border tax laws			-				0.00	%
Tax credits
Sale of Section 48 Energy Tax Credits			(18,034	)			18.83	%
R&D Tax Credit			(18	)			0.02	%
Changes in valuation allowances			18,890				-19.73	%
Nontaxable or nondeductible items
Tax free income - Sale of tax credits			(2,175	)			2.27	%
Federal Fixed Asset Tax Basis Reduction - Tax Credits			1,293				-1.35	%
Stock Compensation			338				-0.35	%
Other non-deductible expenses			351				-0.37	%
Changes in unrecognized tax benefits			-				0.00	%
Other adjustments			912				-0.94	%
Provision (Benefit) for Income Taxes			(18,747	)			19.58	%
*California makes up the majority of state tax expense in this category

 

As previously disclosed, our income tax benefit for the year ended  December 31, 2024, prior to the adoption of ASU 2023-09, 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:

 

		December 31, 2024
Income tax benefit at the federal statutory rate		$	(20,658	)
State tax benefit			(16,360	)
Sale of tax credits			(12,276	)
Foreign tax differential			214
Stock-based compensation			629
Interest Expense			92
Prior year true-ups			5,143
Other			38
Credits			(2,597	)
Valuation Allowance			34,943
Income Tax Benefit			(10,832	)
Effective Tax Rate			11.01	%

 

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

 

		Year Ended December 31,
		2025				2024
Deferred Tax Assets
Organizational Costs, Start-up and Intangible Assets		$	6,028			$	13,998
Stock Based Compensation			2,373				2,003
NOLs, Unabsorbed Depreciation and R&D Credits C/F's			126,110				96,990
Interest expense carryover			45,324				36,867
Ethanol Credits			1,500				1,500
Investment Credits			3,393				3,393
Carbon Oxide Sequestration Credit			9,277				9,277
Accrued Expenses			5,431				3,581
Operating Lease Liability			1,521				1,342
Fixed Asset Grants			5,099				5,226
Other, net			896				512
Total Deferred Tax Assets			206,952				174,689
Valuation Allowance			(195,212	)			(170,298	)
Net Deferred Tax Assets			11,740				4,391
Deferred Tax Liabilities
Right of Use Asset			(1,316	)			(1,211	)
Property, Plant & Equipment			(10,149	)			(3,874	)
Total Deferred Tax Liabilities			(11,465	)			(5,085	)
Net Deferred Tax Assets (Liabilities)		$	275			$	(694	)

 

Based on our evaluation of current and anticipated future taxable income, we believe 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 $0.3 million deferred tax asset is recorded in other assets on the balance sheet.

 

We do not provide for U.S. income taxes for any undistributed earnings of our foreign subsidiaries, as we consider these to be permanently reinvested in the operations of such subsidiaries and have a cumulative foreign loss. At December 31, 2025 and 2024, these undistributed earnings totaled $3.6 million and $6.5 million, respectively. If any earnings were distributed, some countries may impose withholding taxes. However, due to our overall deficit in foreign cumulative earnings and its U.S. loss position, we do 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 our 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. We periodically analyze and adjust 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, 2025, our 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, 2025:

 

United States — Federal	2007 – present
United States — State	2008 – present
India	2013 – present
Mauritius	2006 – present

 

As of December 31, 2025, the Company had U.S. federal NOL carryforwards of approximately $413.0 million and state NOL carryforwards of approximately $538.0 million. As of December 31, 2025, the federal NOLs of $188.0 million and the state NOLs of $538.0 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 $225.0 million have no expiration date.

 

We have approximately $1.5 million of alcohol and cellulosic biofuel credit carryforwards and investment credits of $3.4 million. We have $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, 2025, our India subsidiary had no loss carryforwards.

 

The amount of cash we received/(paid) for tax during the year ended December 31, 2025, is as follows:

 

U.S. Federal (see Note A)		$	22,911
State and local - CA			(19	)
Foreign			(607	)
Received/(Paid)		$	22,285

 

Note A - Includes cash receipts of $22,911 related to the sale of transferable tax credits.