BETA Technologies, Inc.BETA
BETA Technologies, Inc. Income Taxes Disclosure
Income Taxes
The Company's loss before income taxes was taxed as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Domestic | $ | (747,237) | $ | (276,930) | $ | (176,423) | |||||||||||
Foreign | 2,125 | 1,799 | 1,890 | ||||||||||||||
Total loss before income taxes | $ | (745,112) | $ | (275,131) | $ | (174,533) | |||||||||||
The following table summarizes the components of the Company’s provision for income taxes (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | — | $ | — | $ | 29 | |||||||||||
| State | — | 106 | 63 | ||||||||||||||
| Foreign | 518 | 644 | 305 | ||||||||||||||
| Total current provision for income taxes | $ | 518 | $ | 750 | $ | 397 | |||||||||||
| Deferred: | |||||||||||||||||
| Federal | $ | — | $ | — | $ | — | |||||||||||
| State | — | — | — | ||||||||||||||
| Foreign | 238 | (236) | 633 | ||||||||||||||
| Total deferred provision (benefit) for income taxes | 238 | (236) | 633 | ||||||||||||||
| Provision for income taxes | $ | 756 | $ | 514 | $ | 1,030 | |||||||||||
A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective U.S. federal income tax rate is as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Income taxes computed at federal statutory rate | 21.0 | % | 21.0 | % | 21.0 | % | |||||||||||
| State taxes, net of federal benefit | 1.6 | % | 2.8 | % | 2.2 | % | |||||||||||
| Other permanent differences | (1.3 | %) | (1.1 | %) | (1.4 | %) | |||||||||||
| Prior year credit true-up | — | % | 1.1 | % | (4.5 | %) | |||||||||||
Loss on issuance of convertible preferred stock | (10.7 | %) | — | % | — | % | |||||||||||
| Credits | 1.1 | % | 2.1 | % | 2.3 | % | |||||||||||
| Change in valuation allowance | (11.8 | %) | (26.1 | %) | (20.2 | %) | |||||||||||
| Effective income tax rate | (0.1 | %) | (0.2 | %) | (0.6 | %) | |||||||||||
The Company’s deferred tax assets and liabilities consist of the following (in thousands):
| As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Net operating losses | $ | 129,985 | $ | 90,330 | |||||||
| Tax credits | 29,707 | 22,046 | |||||||||
| Stock-based compensation | 3,847 | 2,046 | |||||||||
| Lease liabilities | 5,271 | 8,294 | |||||||||
| Reserves | — | 379 | |||||||||
| Capitalized research and development expenses | 127,402 | 90,202 | |||||||||
| Accruals and other temporary differences | 4,575 | 3,000 | |||||||||
| Total deferred tax assets | 300,787 | 216,297 | |||||||||
Valuation allowance | (279,370) | (191,734) | |||||||||
Total deferred tax assets, net of valuation allowance | $ | 21,417 | $ | 24,563 | |||||||
Deferred tax liabilities: | |||||||||||
| Depreciation | $ | (17,106) | $ | (16,904) | |||||||
| Right-of-use asset | (4,366) | (7,476) | |||||||||
Total deferred tax liabilities | (21,472) | (24,380) | |||||||||
| Net deferred tax (liabilities) assets | $ | (55) | $ | 183 | |||||||
The Company has recorded net deferred tax assets in other non-current assets and net deferred tax liabilities in other liabilities.
As of December 31, 2025, the Company has deferred tax assets primarily related to U.S. federal and state NOL carryforwards of approximately $110,862 and $19,123, respectively, which carryforward indefinitely for U.S. federal purposes and begin to expire in 2030 for state purposes. As of December 31, 2024, the Company had deferred tax assets primarily related to U.S. federal and state NOL carryforwards of approximately $76,592 and $13,738, respectively. The Company has established a full valuation allowance on the U.S. net deferred tax assets as of December 31, 2025 and 2024.
Activity in the deferred tax assets valuation allowance is summarized as follows (in thousands):
| As of December 31, 2023 | $ | 120,116 | |||
| Additions | 71,618 | ||||
Reductions/charges | — | ||||
| As of December 31, 2024 | $ | 191,734 | |||
| Additions | 87,636 | ||||
Reductions/charges | — | ||||
| As of December 31, 2025 | $ | 279,370 | |||
As of December 31, 2025 and 2024, the Company had U.S. federal research and development tax credit carryforwards of approximately $25,269 and $19,043, respectively, which begin to expire in 2039. As of December 31, 2025 and 2024, the Company had state research and development tax credit carryforwards of approximately $4,311 and $2,858, respectively, which begin to expire in 2032. As of December 31, 2025 and 2024, the Company had foreign federal research and development tax credit carryforwards of approximately $127 and $144, respectively, which begin to expire in 2043.
The Company’s ability to utilize the NOLs and tax credit carryforwards in the future may be subject to restrictions in the event of past or future ownership changes, as defined in Sections 382 and 383 of the U.S. Internal Revenue Code of 1986, as amended, and similarly restricting state or foreign tax laws, or changes to such laws.
The Company files federal and state income tax returns in the United States as well as tax returns in certain foreign jurisdictions. All tax years since incorporation remain open to examination by the major taxing jurisdictions (U.S. federal, state and foreign) to which the Company is subject. Carryforward attributes generated in years past may still be adjusted upon examination by the Internal Revenue Service (“IRS”) or other authorities if they have, or will be, used in a future period. As of December 31, 2025, the Company is not under examination by the IRS or any other jurisdictions for any tax year. Subsequent to December 31, 2025, the Company was notified that it is under examination for 2024 for a foreign jurisdiction.
The Company evaluates uncertain tax positions on an annual basis and adjusts the level of the liability to reflect any subsequent changes in the relevant facts surrounding the uncertain positions. As of December 31, 2025, the Company had no recorded liabilities for uncertain tax positions.
The Company permanently reinvests the earnings of its foreign subsidiaries and therefore, does not provide for taxes that could result from the distributions of those earnings to the United States.
On July 4, 2025, the reconciliation bill, commonly referred to as the One Big Beautiful Bill Act (“OBBBA”), was signed into law. Changes to corporate income tax as a result of the OBBBA include the extension and modification of many provisions of the TCJA. There was no material impact to the Company's 2025 tax rate as a result of the OBBBA.
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.