Installed Building Products, Inc.IBP
Installed Building Products, Inc. Income Taxes Disclosure
INCOME TAXES
The provision for income taxes is comprised of the following (in millions):
| Years ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | 69.1 | $ | 69.4 | $ | 66.2 | |||||||||||
| State and local | 18.8 | 18.8 | 22.6 | ||||||||||||||
| 87.9 | 88.2 | 88.8 | |||||||||||||||
| Deferred: | |||||||||||||||||
| Federal | 3.6 | 1.3 | 0.5 | ||||||||||||||
| State and local | 0.1 | 0.3 | 0.1 | ||||||||||||||
| 3.7 | 1.6 | 0.6 | |||||||||||||||
| Total tax expense | $ | 91.6 | $ | 89.8 | $ | 89.4 | |||||||||||
We have chosen to apply the requirements of ASU 2023-09 prospectively, so enhanced disclosures reflected in the below table only apply to the year ended December 31, 2025. See Note 2, Significant Accounting Policies, for additional information on this accounting standards update. The reconciliation between our effective tax rate on net income and the federal statutory rate is as follows (in millions):
| Years ended December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| $ | 75.0 | 21.0 | % | $ | 72.7 | 21.0 | % | $ | 70.0 | 21.0 | % | ||||||||||||||||||||||||
State and local income taxes, net of federal benefit (1) | 14.8 | 4.2 | % | 15.4 | 4.4 | % | 17.9 | 5.4 | % | ||||||||||||||||||||||||||
| Tax credits | (0.5) | (0.2) | % | — | — | % | — | — | % | ||||||||||||||||||||||||||
| Stock compensation | 0.5 | 0.1 | % | (1.1) | (0.3) | % | (0.5) | (0.2) | % | ||||||||||||||||||||||||||
| Other permanent items | — | — | % | 2.3 | 0.7 | % | 1.8 | 0.5 | % | ||||||||||||||||||||||||||
| Nontaxable or deductible items | 1.4 | 0.4 | % | — | — | % | — | — | % | ||||||||||||||||||||||||||
| Change in unrecognized tax benefits | 0.4 | 0.1 | % | 0.5 | 0.1 | % | 0.2 | 0.1 | % | ||||||||||||||||||||||||||
| Total tax expense | $ | 91.6 | 25.6 | % | $ | 89.8 | 25.9 | % | $ | 89.4 | 26.8 | % | |||||||||||||||||||||||
(1) During the year ended December 31, 2025, states that make up the majority (greater than 50%) of the effect of the state and local income tax expenses are California, Minnesota, Florida, Wisconsin, Indiana, Texas, Virginia, North Carolina and Colorado.
Components of the net deferred tax asset or liability are as follows (in millions):
| As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred Tax Assets | |||||||||||
| Long-term | |||||||||||
| Accrued liabilities and allowances | $ | 11.6 | $ | 13.0 | |||||||
| Allowance for doubtful accounts | 2.5 | 1.9 | |||||||||
| Inventories | 1.7 | 1.5 | |||||||||
| Property and equipment | 0.3 | 0.3 | |||||||||
| Intangibles | 12.3 | 10.6 | |||||||||
| Other | 0.1 | — | |||||||||
| Long-term deferred tax assets | 28.5 | 27.3 | |||||||||
| Deferred Tax Liabilities | |||||||||||
| Long-term | |||||||||||
| Accrued liabilities and allowances | (2.9) | (2.7) | |||||||||
| Property and equipment | (9.9) | (9.9) | |||||||||
| Intangibles | (20.3) | (15.7) | |||||||||
| Investment in partnership | (18.8) | (23.4) | |||||||||
| Other | (1.0) | (1.5) | |||||||||
| Long-term deferred tax liabilities | (52.9) | (53.2) | |||||||||
| Net deferred tax liabilities | $ | (24.4) | $ | (25.9) | |||||||
| The above amounts are included in our Consolidated Balance Sheets as follows: | |||||||||||
| Other non-current assets | 0.3 | 0.4 | |||||||||
| Long-term deferred income tax liabilities | (24.7) | (26.3) | |||||||||
| Net deferred tax liabilities | $ | (24.4) | $ | (25.9) | |||||||
Valuation Allowance
We assess the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets on a jurisdiction and by tax filing entity basis. A significant piece of objective negative evidence evaluated is cumulative losses incurred over the most recent three-year period. Such objective evidence limits our ability to consider other subjective positive evidence such as our projections for future growth. Based on this evaluation, no valuation allowance has been recorded as of December 31, 2025 or 2024.
Income Taxes Paid
Income taxes paid, net of refunds received, by jurisdiction is as follows (in millions):
| Year ended December 31, | ||||||||
| 2025 | ||||||||
US federal (1) | $ | 64.0 | ||||||
| State and local | 18.1 | |||||||
| Total income taxes paid | $ | 82.1 | ||||||
(1) Includes cash payments of $7.5 million to acquire transferrable tax credits, which were applied to our federal income tax obligations.
During the year ended December 31, 2025, no individual jurisdiction's income taxes paid (net of refunds received) exceeds five percent of total income taxes paid (net of refunds received).
Unrecognized Tax Benefits
We are subject to taxation in the United States and various state jurisdictions. As of December 31, 2025, our tax years for 2021 through 2024 are subject to examination by the tax authorities. A rollforward of the gross unrecognized tax benefits is as follows (in millions):
| Unrecognized tax benefit, December 31, 2022 | $ | 4.9 | |||
| Increase as a result of tax positions taken during the period | 7.5 | ||||
| Decrease as a result of tax positions taken during the period | (5.5) | ||||
| Increase as a result of expiring statutes | 0.1 | ||||
| Unrecognized tax benefit, December 31, 2023 | $ | 7.0 | |||
| Increase as a result of tax positions taken during the period | 7.7 | ||||
| Decrease as a result of tax positions taken during the period | (7.0) | ||||
| Decrease as a result of expiring statutes | (0.1) | ||||
| Unrecognized tax benefit, December 31, 2024 | $ | 7.6 | |||
| Increase as a result of tax positions taken during the period | 7.5 | ||||
| Decrease as a result of tax positions taken during the period | (7.6) | ||||
| Increase as a result of expiring statutes | 0.4 | ||||
| Unrecognized tax benefit, December 31, 2025 | $ | 7.9 | |||
We had no unrecognized tax benefits at December 31, 2025 that would unfavorably affect the effective tax rate. Interest expense and penalties accrued related to uncertain tax positions as of December 31, 2025 and 2024 are $1.4 million and $1.2 million, respectively.
In July 2025, the One Big Beautiful Bill Act (the "OBBB Act") was enacted in the United States. The OBBB Act made permanent certain key provisions from the 2017 Tax Cuts and Jobs Act, with other provisions becoming effective through 2027. We are still assessing the new provisions under the OBBB Act to determine what impact it will have on future effective tax rates as a result of its enactment.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Feb 27, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Feb 28, 2017 | |
| 2015 | Mar 9, 2016 | |
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.