GLOBAL INDUSTRIAL CoGIC
GLOBAL INDUSTRIAL Co Income Taxes Disclosure
INCOME TAX
No single state or foreign jurisdiction exceeded five percent of total income taxes paid for the years ended December 31, 2025, 2024 and 2023.
The following table summarizes our U.S. and foreign components of income from continuing operations before income taxes (in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| United States | $ | 95.2 | $ | 80.5 | $ | 91.6 | |||||||||||
| Foreign | 2.4 | (0.7) | 3.6 | ||||||||||||||
| Total | $ | 97.6 | $ | 79.8 | $ | 95.2 | |||||||||||
The following table summarizes by jurisdiction our income taxes paid, net of refunds (in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
U.S. Federal | $ | 20.2 | $ | 14.4 | $ | 19.0 | |||||||||||
U.S. State | 3.3 | 3.4 | 4.6 | ||||||||||||||
Foreign | 0.2 | 0.2 | 0.2 | ||||||||||||||
| Total | $ | 23.7 | $ | 18.0 | $ | 23.8 | |||||||||||
The following table summarizes the (benefit) provision for income taxes from continuing operations (in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current: | |||||||||||||||||
U.S. Federal | $ | 19.8 | $ | 15.9 | $ | 18.1 | |||||||||||
U.S. State | 4.9 | 3.4 | 4.2 | ||||||||||||||
| Foreign | 0.3 | 0.3 | 0.2 | ||||||||||||||
| Total current | $ | 25.0 | $ | 19.6 | $ | 22.5 | |||||||||||
| Deferred: | |||||||||||||||||
U.S. Federal | $ | 0.2 | $ | (0.3) | $ | 0.9 | |||||||||||
U.S. State | 0.0 | 0.2 | 0.2 | ||||||||||||||
| Foreign | 0.4 | (0.4) | 0.9 | ||||||||||||||
| Total deferred | $ | 0.6 | $ | (0.5) | $ | 2.0 | |||||||||||
| Total tax provision | $ | 25.6 | $ | 19.1 | $ | 24.5 | |||||||||||
Tax expense from discontinued operations was $0.0 million, $0.1 million and $0.0 million for the years ended December 31, 2025, 2024 and 2023, respectively. Income taxes are accrued and paid by each foreign entity in accordance with applicable local regulations.
A reconciliation of the difference between the income tax expense and the computed income tax expense from continuing operations based on the Federal statutory corporate rate is as follows (in millions):
| Year Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
Income tax at U.S. Federal statutory rate | $ | 20.5 | 21.0 | % | $ | 16.8 | 21.0 | % | $ | 20.0 | 21.0 | % | |||||||||||||||||||||||
State and local income taxes, net of federal tax benefit (1) | 4.0 | 4.1 | % | 2.8 | 3.5 | % | 3.5 | 3.7 | % | ||||||||||||||||||||||||||
| Foreign tax effects | 0.1 | 0.1 | % | 0.0 | 0.0 | % | 0.2 | 0.2 | % | ||||||||||||||||||||||||||
| Effect of cross-border tax laws | (0.2) | (0.2) | % | (0.2) | (0.2) | % | 0.2 | 0.2 | % | ||||||||||||||||||||||||||
| Stock based compensation | (0.1) | (0.1) | % | (0.2) | (0.2) | % | (0.1) | (0.1) | % | ||||||||||||||||||||||||||
Nondeductible items | 1.1 | 1.1 | % | 0.0 | 0.0 | % | 0.5 | 0.5 | % | ||||||||||||||||||||||||||
| Other items, net | 0.2 | 0.2 | % | (0.1) | (0.2) | % | 0.2 | 0.2 | % | ||||||||||||||||||||||||||
| Income tax | $ | 25.6 | 26.2 | % | $ | 19.1 | 23.9 | % | $ | 24.5 | 25.7 | % | |||||||||||||||||||||||
(1) In 2025, state taxes in California, Wisconsin, Illinois, Pennsylvania, New York, Georgia and New Jersey made up the majority (greater than 50%) of the tax expense in this category. In 2024, state taxes in California, Wisconsin, Illinois, Pennsylvania and Minnesota made up the majority (greater than 50%) of the tax expense in this category. In 2023, state taxes in California, Wisconsin, Illinois, Pennsylvania, New York and New Jersey made up the majority (greater than 50%) of the tax expense in this category.
The Company's deferred tax assets and liabilities are comprised of the following (in millions):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Assets: | |||||||||||
| Accrued expenses and other liabilities | $ | 2.0 | $ | 1.9 | |||||||
| Inventory | 2.4 | 2.2 | |||||||||
| Operating lease obligations | 25.4 | 20.3 | |||||||||
| Intangible & other | 1.3 | 2.0 | |||||||||
| Net operating loss and credit carryforwards | 5.7 | 6.2 | |||||||||
| Valuation allowances | (5.0) | (4.9) | |||||||||
| Total deferred tax assets | $ | 31.8 | $ | 27.7 | |||||||
| Liabilities: | |||||||||||
| Operating lease right-of-use assets | $ | 22.4 | $ | 17.8 | |||||||
| Other | 2.1 | 1.8 | |||||||||
| Total deferred tax liabilities | $ | 24.5 | $ | 19.6 | |||||||
The following table summarizes the changes in valuation allowance (in millions):
| Balance at Beginning of Period | Benefit Recognized in Expense | Write-offs | Other | Balance at End of Period | ||||||||||||||||||||||||||||
| 2025 | $ | (4.9) | $ | 0.0 | $ | 0.00 | $ | (0.1) | $ | (5.0) | ||||||||||||||||||||||
| 2024 | $ | (5.2) | $ | 0.0 | $ | 0.2 | $ | 0.1 | $ | (4.9) | ||||||||||||||||||||||
During 2025 the Company utilized approximately $2.6 million in foreign and state NOL carryforwards to reduce the current year tax expense. As of December 31, 2025, the Company has foreign NOLs of $4.9 million which expire through 2038 and foreign tax credit carryforwards of $0.3 million expiring in years through 2029. The Company has recorded valuation allowances of approximately $5.0 million, consisting of valuations against foreign NOLs of $4.7 million and $0.3 million against foreign tax carryforwards. Valuation allowances have been recorded against these assets as the Company believes it is more likely than not that these NOLs, temporary differences and foreign tax credits will not be utilized in the near future.
The Company has not provided for federal income taxes applicable to the undistributed earnings of its foreign subsidiaries of approximately $2.4 million as of December 31, 2025. If the Company ceases to be permanently reinvested in its foreign subsidiaries, the Company may be subject to foreign withholding and other taxes on undistributed earnings and may need to record a deferred tax liability for any outside basis difference in its investments in its foreign subsidiaries.
Under the TCJA each U.S. shareholder of a controlled foreign corporation ("CFC") must include in its gross taxable income in any tax year the aggregate net GILTI, or net income, of its CFCs. In 2025 the Company has included in taxable income the net income of its subsidiaries in Canada and India. The Company has elected to treat GILTI expense as a period cost when incurred.
The Company is routinely audited by federal, state and foreign tax authorities with respect to its income taxes. The Company regularly reviews and evaluates the likelihood of audit assessments. The Company’s federal income tax returns have been audited through 2016. The Company has not signed any consent to extend the statute of limitations for any subsequent years. The Company’s significant state tax returns have been audited through 2016. The Company considers its significant tax jurisdictions in foreign locations to be Canada and India.
As of December 31, 2025, the Company had no uncertain tax positions. Interest and penalties, if any, are recorded in income tax expense. There were no accrued interest or penalty charges related to unrecognized tax benefits recorded in income tax expense in 2025, 2024 or 2023.
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.