National Vision Holdings, Inc.EYE
National Vision Holdings, Inc. Income Taxes Disclosure
Income taxes
The income tax provision (benefit) consists of:
| In thousands | Fiscal Year 2025 | Fiscal Year 2024 | Fiscal Year 2023 | ||||||||||||||
| Current income tax: | |||||||||||||||||
| Federal | $ | 3,190 | $ | 9,333 | $ | 8,278 | |||||||||||
| State | 2,502 | 2,123 | 3,717 | ||||||||||||||
| Deferred income tax: | |||||||||||||||||
| Federal | 5,839 | (8,869) | (3,878) | ||||||||||||||
| State | 550 | (1,106) | (2,111) | ||||||||||||||
| Income tax provision (benefit) from continuing operations | $ | 12,081 | $ | 1,481 | $ | 6,006 | |||||||||||
Our income tax provision (benefit) differs from the amounts computed by multiplying earnings (loss) before income taxes by the statutory federal income tax rate.
| In thousands | Fiscal Year 2025 | Fiscal Year 2024 | Fiscal Year 2023 | |||||||||||||||||||||||
| Earnings (loss) from continuing operations before income taxes | $ | 41,681 | $ | (25,684) | $ | 9,552 | ||||||||||||||||||||
| Federal income tax provision at statutory rate | 8,753 | 21.0 | % | (5,394) | 21.0 | % | 2,006 | 21.0 | % | |||||||||||||||||
State income tax provision, net of federal income tax (a) | 2,422 | 5.8 | % | 895 | (3.5) | % | 1,686 | 17.7 | % | |||||||||||||||||
Tax credits: | ||||||||||||||||||||||||||
Work opportunity tax credit | (899) | (2.2) | % | (747) | 2.9 | % | (1,143) | (12.0) | % | |||||||||||||||||
| Increase (decrease) in deferred tax asset valuation allowance | (912) | (2.2) | % | (1,272) | 5.0 | % | 2,238 | 23.4 | % | |||||||||||||||||
Nontaxable or nondeductible items: | ||||||||||||||||||||||||||
| Executive compensation limitation | 623 | 1.5 | % | 994 | (3.9) | % | 354 | 3.7 | % | |||||||||||||||||
| Goodwill impairment | — | — | % | 3,539 | (13.8) | % | — | — | % | |||||||||||||||||
| Tax provision (benefit) of equity-based compensation deductions | 876 | 2.1 | % | 1,240 | (4.8) | % | 1,133 | 11.9 | % | |||||||||||||||||
| Meals and entertainment | 327 | 0.8 | % | 369 | (1.4) | % | 433 | 4.5 | % | |||||||||||||||||
| Other | 14 | — | % | (22) | 0.1 | % | (64) | (0.7) | % | |||||||||||||||||
Other adjustments: | ||||||||||||||||||||||||||
| Net operating loss limitation | 467 | 1.1 | % | — | — | % | — | — | % | |||||||||||||||||
| Other, net | 410 | 1.1 | % | 1,879 | (7.4) | % | (637) | (6.6) | % | |||||||||||||||||
Net income tax provision (benefit) from continuing operations / Effective tax rate | $ | 12,081 | 29.0 | % | $ | 1,481 | (5.8) | % | $ | 6,006 | 62.9 | % | ||||||||||||||
Note: Percentages reflect line item as a percentage of earnings (loss) from continuing operations before income taxes, adjusted for rounding. | ||||||||||||||||||||||||||
(a) State taxes in Texas, Florida, California, New Jersey and Illinois made up the majority (greater than 50 percent) of the tax effect in this category. | ||||||||||||||||||||||||||
Incomes taxes paid (net of refunds) are as follows:
| In thousands | Fiscal Year 2025 | Fiscal Year 2024 | Fiscal Year 2023 | ||||||||||||||
| Federal | $ | 17,844 | $ | 4,200 | $ | 2,795 | |||||||||||
State | 3,302 | 2,132 | 4,776 | ||||||||||||||
Total income taxes paid | $ | 21,146 | $ | 6,332 | $ | 7,571 | |||||||||||
Income taxes paid (net of refunds) exceeded 5 percent of total income taxes paid (net of refunds) in the following jurisdictions:
| In thousands | Fiscal Year 2025 | Fiscal Year 2024 | Fiscal Year 2023 | ||||||||||||||
| Texas | * | $ | 606 | 578 | |||||||||||||
* Jurisdiction below the threshold for the period presented. | |||||||||||||||||
The sources of the differences between the financial accounting and tax bases of our assets and liabilities that give rise to the deferred tax assets and deferred tax liabilities and the tax effects of each are as follows:
| In thousands | As of January 3, 2026 | As of December 28, 2024 | |||||||||
| Deferred tax assets: | |||||||||||
| NOL carry-forwards | $ | 6,454 | $ | 8,017 | |||||||
| Credit carryforwards | 289 | 274 | |||||||||
| Deferred revenue | 6,126 | 5,999 | |||||||||
| Accrued expenses and reserves | 12,425 | 13,811 | |||||||||
| Loss on equity and other investments | 878 | 886 | |||||||||
| Stock-based compensation | 7,936 | 6,191 | |||||||||
| Operating lease liabilities | 114,237 | 120,990 | |||||||||
| Subtotal | 148,345 | 156,168 | |||||||||
| Valuation allowances | (5,458) | (5,961) | |||||||||
| Total net deferred tax assets | 142,887 | 150,207 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Depreciation of property and equipment | (58,634) | (57,150) | |||||||||
| Amortization of intangible assets | (65,051) | (65,168) | |||||||||
| Right of use asset | (98,716) | (102,446) | |||||||||
| Other | (3,058) | (3,352) | |||||||||
| Total deferred tax liabilities | (225,459) | (228,116) | |||||||||
| Net deferred tax liabilities | $ | (82,572) | $ | (77,909) | |||||||
As of fiscal year-end 2025, our consolidated VIEs had $9.8 million of U.S. federal NOL carry-forwards available to reduce future federal income taxes, all of which have no expiration date. $6.7 million of these NOL carry-forwards ($1.4 million tax-effected) carry a full valuation allowance because it is more likely than not that a future tax benefit will not be realized. In addition, we have NOL carry-forwards in varying amounts and with differing expiration dates in multiple states in which we operate.
For the fiscal year end 2025, we carry various state tax credits totaling $0.3 million that are available to offset certain future taxes. These state credits carry a valuation allowance of $0.1 million for the portion that we do not expect to be able to utilize in future periods.
We have a $0.9 million deferred income tax asset for capital losses associated with the losses realized on the sale of our equity method non-consolidated investee. We do not expect to generate significant capital gains in the near future. Therefore, we believe it is more likely than not that we will not realize a tax benefit for the majority of these deferred income tax assets. Accordingly, we have established a full valuation allowance against this deferred asset.
As a result of our utilization of NOL carry-forwards to reduce or eliminate subsequent years’ tax obligations, our federal and a substantial number of our state income tax returns for fiscal years 2001 through 2025 remain open for examination by the tax authorities.
The Company evaluates uncertain tax positions using a “more-likely-than-not” threshold and recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by tax authorities. The Company evaluates uncertain tax positions on a quarterly basis and considers various factors, including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, information obtained during in-process audit activities and changes in facts or circumstances related to a tax position.
In July 2025 the One Big Beautiful Bill Act (the "Tax Act") was enacted, introducing a series of corporate tax changes in the U.S. including 100% bonus depreciation on qualified property. The impacts of the Tax Act are reflected in our results for the fiscal year 2025, and there was no material impact to our income tax expense or effective tax rate. Certain provisions decreased cash taxes paid in the current fiscal year and may change the timing of cash tax payments in future periods.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Mar 4, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Feb 28, 2022 | |
| 2021 | Mar 3, 2021 | |
| 2019 | Feb 26, 2020 | |
| 2018 | Feb 27, 2019 | |
| 2017 | Mar 8, 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.