Global Water Resources, Inc.GWRS

Global Water Resources, Inc. Income Taxes Disclosure

10-KFiled Mar 4, 20262 min read
Income TaxesIncome Taxes
Income Tax Expense
The components of income tax expense were as follows:
Years Ended
December 31,
(in thousands)20252024
Current income tax expense
Federal$820 $460 
State148 140 
Total current968 600 
Deferred income tax expense
Federal45 1,294 
State13 179 
Total deferred58 1,473 
Income tax expense$1,026 $2,073 
Statutory Rate Reconciliation
The following table represents a reconciliation of income tax expense at the statutory federal income tax rate to the actual income tax expense from continuing operations:
For the Years Ended
December 31,
(in thousands)20252024
Book income before taxes$3,983 $7,862 
Computed federal tax expense at statutory rate836 21.0 %1,651 21.0 %
State income taxes - net of federal tax benefit158 4.0 %318 4.0 %
Nontaxable or nondeductible items
Tax regulatory asset amortization37 0.9 %37 0.5 %
Other18 0.5 %10 0.1 %
Other differences(23)(0.6)%57 0.8 %
Income tax expense$1,026 25.8 %$2,073 26.4 %
All of the Company’s income before income taxes and income tax expense for the years ended December 31, 2025 and 2024 were attributable to domestic operations. The Company had no foreign income or income tax expense during these periods. Further, the Company operates solely in the state of Arizona, therefore all state income tax expense pertains to Arizona.
Components of Net Deferred Income Tax Liability
The following table summarizes the Company’s temporary differences between book and tax accounting that give rise to the deferred tax assets and deferred tax liabilities:
(in thousands)December 31, 2025December 31, 2024
Deferred tax assets
Deferred gain on ICFA funds received$5,664 $5,352 
AIAC4,248 4,248 
Balterra intangible asset acquisition224 224 
Other2,247 1,353 
Total deferred tax assets12,383 11,177 
Deferred tax liabilities
Utility plant(18,720)(17,983)
Regulatory liability (199)(214)
CP Water intangible asset acquisition(381)(381)
ICFA intangible asset(452)(452)
Gain on condemnation of Valencia(140)(184)
Other Liabilities(2,190)(1,661)
Total deferred tax liabilities(22,082)(20,875)
Net deferred tax liability$(9,699)$(9,698)
As of December 31, 2025, the Company has no net operating loss carry forwards and no uncertain tax positions.
Cash Paid For Taxes
Income taxes paid, net of refunds received were as follows:
(in thousands)Years Ended
December 31,
20252024
Cash paid for income taxes
Federal$1,542 $107 
State190 — 
Total taxes paid, net of refunds$1,732 $107 

Historical Timeline

Fiscal YearFiled
2025Mar 4, 2026Showing above
2024Mar 5, 2025
2023Mar 7, 2024
2022Mar 9, 2023
2021Mar 10, 2022
2020Mar 4, 2021
2018Mar 7, 2019
2017Mar 9, 2018
2016Mar 10, 2017

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.

Other Available Disclosures

RevenueEarnings Per ShareFair ValuePP&EGoodwill & IntangiblesLeasesSegmentsDebtCommitmentsStock CompensationNew Standards