BrightView Holdings, Inc. Income Taxes Disclosure
11. Income Taxes
The components of income tax expense (benefit) are as follows:
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Fiscal Year Ended |
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September 30, 2025 |
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September 30, 2024 |
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September 30, 2023 |
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Current: |
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Federal |
|
$ |
(1.3 |
) |
|
$ |
23.1 |
|
|
$ |
22.7 |
|
State |
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|
5.6 |
|
|
|
5.3 |
|
|
|
3.4 |
|
Deferred: |
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|||
Federal |
|
|
19.9 |
|
|
|
(0.8 |
) |
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|
(22.4 |
) |
State |
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|
(1.9 |
) |
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|
1.3 |
|
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|
(4.2 |
) |
Valuation allowance |
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|
3.0 |
|
|
|
1.2 |
|
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|
5.1 |
|
Total income tax (benefit) expense |
|
$ |
25.3 |
|
|
$ |
30.1 |
|
|
$ |
4.6 |
|
Income tax expense (benefit) differs from the amount computed at the federal statutory corporate tax rate as follows:
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Fiscal Year Ended |
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September 30, 2025 |
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September 30, 2024 |
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September 30, 2023 |
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Amount |
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Percent |
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|
Amount |
|
Percent |
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|
Amount |
|
Percent |
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||||||
U.S. Federal Statutory Rate |
|
$ |
17.1 |
|
|
21.0 |
% |
|
$ |
20.3 |
|
|
21.0 |
% |
|
$ |
(0.7 |
) |
|
21.0 |
% |
State and Local Income Taxes, Net of Federal Income Tax Effect (a)(b) |
|
|
4.9 |
|
|
6.0 |
% |
|
|
6.2 |
|
|
6.4 |
% |
|
|
4.8 |
|
|
(155.5 |
%) |
Tax Credits |
|
|
(0.6 |
) |
|
(0.7 |
%) |
|
|
(0.6 |
) |
|
(0.6 |
%) |
|
|
(0.7 |
) |
|
22.4 |
% |
Foreign Tax Effects |
|
|
0.9 |
|
|
1.1 |
% |
|
|
— |
|
|
0.0 |
% |
|
|
— |
|
|
0.0 |
% |
Nontaxable or Nondeductible Items |
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Non-deductible officers' compensation |
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2.1 |
|
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2.6 |
% |
|
|
1.3 |
|
|
1.4 |
% |
|
|
1.1 |
|
|
(36.4 |
%) |
Divestiture - Non-deductible goodwill |
|
|
- |
|
|
0.0 |
% |
|
|
1.2 |
|
|
1.2 |
% |
|
|
— |
|
|
0.0 |
% |
Other Adjustments |
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|
0.9 |
|
|
1.1 |
% |
|
|
1.7 |
|
|
1.8 |
% |
|
|
0.1 |
|
|
(0.7 |
%) |
Effective Tax Rate |
|
$ |
25.3 |
|
|
31.1 |
% |
|
$ |
30.1 |
|
|
31.2 |
% |
|
$ |
4.6 |
|
|
(149.2 |
%) |
The components of the Company’s net deferred tax asset and liability accounts resulting from temporary differences between the tax and financial reporting basis of assets and liabilities are as follows:
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September 30, 2025 |
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September 30, 2024 |
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Deferred tax assets: |
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Self-insurance reserves |
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$ |
37.6 |
|
|
$ |
37.3 |
|
Deferred compensation |
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|
1.8 |
|
|
|
2.2 |
|
Payroll related accruals |
|
|
23.5 |
|
|
|
25.3 |
|
Allowance for doubtful accounts |
|
|
2.5 |
|
|
|
2.5 |
|
Lease liabilities |
|
|
19.8 |
|
|
|
22.3 |
|
Net operating loss carryforward |
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|
8.2 |
|
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|
4.9 |
|
Business interest expense |
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|
31.1 |
|
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|
17.2 |
|
Other non-current deferred tax assets |
|
|
1.3 |
|
|
|
1.2 |
|
Total non-current deferred tax assets |
|
|
125.8 |
|
|
|
112.9 |
|
Valuation allowance |
|
|
(9.3 |
) |
|
|
(6.3 |
) |
Total deferred tax assets |
|
$ |
116.5 |
|
|
$ |
106.6 |
|
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Deferred tax liabilities: |
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Intangible assets |
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$ |
49.3 |
|
|
$ |
47.1 |
|
Property and equipment |
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96.6 |
|
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|
63.2 |
|
Deferred revenue |
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|
14.5 |
|
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|
16.6 |
|
Prepaid assets |
|
|
0.3 |
|
|
|
0.1 |
|
Lease assets |
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|
18.2 |
|
|
|
20.7 |
|
Other non-current deferred tax liabilities |
|
|
1.4 |
|
|
|
1.5 |
|
Total non-current deferred tax liabilities |
|
|
180.3 |
|
|
|
149.2 |
|
Total net deferred tax liabilities |
|
$ |
63.8 |
|
|
$ |
42.6 |
|
Classification on balance sheets: |
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Other assets |
|
$ |
- |
|
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$ |
1.3 |
|
Deferred tax liabilities |
|
|
63.8 |
|
|
|
43.9 |
|
The components of income taxes paid (net of refunds) are as follows:
|
|
Fiscal Year Ended |
|
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|
|
September 30, 2025 |
|
|
September 30, 2024 |
|
|
September 30, 2023 |
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|||
Federal |
|
$ |
- |
|
|
$ |
31.9 |
|
|
$ |
(17.4 |
) |
State |
|
|
6.3 |
|
|
|
2.5 |
|
|
|
7.6 |
|
Foreign |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total |
|
$ |
6.3 |
|
|
$ |
34.4 |
|
|
$ |
(9.8 |
) |
Income taxes paid (net of refunds) exceeded 5% of total income taxes paid (net of refunds) in the following jurisdictions:
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|
Fiscal Year Ended |
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September 30, 2025 |
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September 30, 2024 |
|
September 30, 2023 |
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State |
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Arizona |
|
$ |
0.4 |
|
|
* |
|
* |
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|
California |
|
|
1.5 |
|
|
* |
|
|
3.2 |
|
Florida |
|
|
1.3 |
|
|
* |
|
|
0.9 |
|
Massachusetts |
|
|
0.5 |
|
|
* |
|
* |
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|
South Carolina |
|
* |
|
|
* |
|
|
0.7 |
|
|
Texas |
|
|
0.6 |
|
|
* |
|
|
0.7 |
|
* Jurisdiction below the threshold for the period presented.
The CARES Act
In March 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was signed into law and included various provisions to provide additional economic relief to address the impact of the COVID-19 pandemic. Notable provisions included net operating loss carrybacks, adjustments to the interest expense limitations under the U.S Tax Code Section 163(j), increase in the charitable contributions limitation, payroll tax deferrals of the employer portion of social security tax, a portion of which was repaid during the year ended September 30, 2022 and the remainder of which was repaid in fiscal year 2023, and an employee retention credit for wages paid to an idle employee under certain circumstances resulting from the COVID-19 pandemic. The Company recorded a tax receivable of $39.0 and a benefit of $10.1 to the tax provision for the tax net operating losses incurred in 2021 from the enactment of the CARES Act, net of adjustments. The tax net operating losses have been carried back to prior years. The Company has received all but $8.4 of the benefit from the carryback claims as of September 30, 2025. Further, the Company previously elected to defer the employer portion of social security taxes through 2020 and has filed for the employee retention credit allowed for under the CARES Act. The Company recorded a tax credit of $3.3 related to the employee retention credit and has received all but $0.4 as of September 30, 2025.
One Big Beautiful Bill Act
In July 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law and included various provisions amending the Tax Cuts and Jobs Act of 2017. Notable provisions included 100% bonus depreciation, adjustments to the interest expense limitations under 163(j), and research and development expenditures. The use of 100% bonus depreciation on capital investments and expansion of the 163(j) interest expense limitation to EBITDA (beginning in fiscal year 2026 for the Company) will both have favorable effects on cash taxes paid in the near-term.
Net Operating Losses and Interest Expense Carryforwards
As of September 30, 2025, the Company recorded a tax-effected cumulative Federal Net Operating Loss ("NOL") of $3.0, which can be carried forward indefinitely. The Company also has state income tax net operating losses of $95.2 having varying expirations from fiscal year 2026 through an indefinite useful life. The Company has a federal interest expense carryforward of $111 and state interest expense carryforwards of $149.5 that can be carried forward indefinitely. The Company believes it is more likely than not it will be unable to utilize some of its separate state net operating losses and separate state interest expense carryforwards to offset future income. The increase to the valuation allowance was $2.1 in FY2025. The Company has a $2.8 Canadian net operating loss carryforward that it more likely than not will not be able to utilize. Therefore, there is also a full valuation allowance recorded against this net operating loss in the amount of $0.9.
At September 30, 2025, $8.4 of the valuation allowances presented above relate to separate state net operating loss and interest expense carryforwards that are not expected to be realized. We evaluate the realization of deferred tax assets by considering such factors as the reversal of existing taxable temporary differences, expected profitability by tax jurisdiction and available carryforward periods. The extent and timing of any such reversals will influence the extent of tax benefits recognized in a particular year. Should applicable losses, credits, and deductions ultimately be realized, the resulting reduction in the valuation allowance would generally be recognized as an income tax benefit.
Uncertain Income Tax Positions
As of September 30, 2025 and 2024, the Company had no unrecognized tax benefits that, if recognized, would impact the Company's effective tax rate. The total amount of unrecognized tax benefits could change within the next twelve months for a number of reasons including audit settlements, tax examination activities and the recognition and measurement considerations under this guidance.
The Company files income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions, as well as Canada. The Company’s returns are no longer subject to U.S. federal and state tax examination for years before 2020 and 2019, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Nov 19, 2025 | Showing above |
| 2024 | Nov 13, 2024 | |
| 2023 | Nov 16, 2023 | |
| 2022 | Nov 17, 2022 | |
| 2021 | Nov 17, 2021 | |
| 2020 | Nov 18, 2020 | |
| 2019 | Nov 21, 2019 | |
| 2018 | Nov 28, 2018 | |
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.