ImmunityBio, Inc.IBRX
ImmunityBio, Inc. Income Taxes Disclosure
Income Taxes
We are subject to U.S. federal income tax, as well as income tax in California, other states, and other certain foreign jurisdictions. Except for state franchise taxes, the company has not been required to pay significant U.S. federal and state income taxes because of current and accumulated NOLs. Our federal returns for tax years 2022 through 2024 remain open to examination, and our state returns remain subject to examination for tax years 2021 through 2024. NOL carryforwards and tax credits are still subject to examination in the year they are used. No income tax returns are currently under examination by taxing authorities.
There are no cumulative earnings in our foreign subsidiaries as of December 31, 2025 that would be subject to U.S. income tax or foreign withholding tax. We plan to indefinitely reinvest any future earnings of our foreign subsidiaries.
Our loss before income taxes is as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| U.S. loss before income taxes | $ | (348,393) | $ | (410,458) | $ | (581,136) | |||||||||||
| Foreign loss before income taxes | (3,214) | (3,187) | (2,756) | ||||||||||||||
| Loss before income taxes | $ | (351,607) | $ | (413,645) | $ | (583,892) | |||||||||||
Income tax (expense) benefit consists of the following (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | — | $ | — | $ | — | |||||||||||
| State | (4) | — | 26 | ||||||||||||||
| Foreign | — | — | — | ||||||||||||||
| Total current | (4) | — | 26 | ||||||||||||||
| Deferred: | |||||||||||||||||
| Federal | 111 | — | 5 | ||||||||||||||
| State | 28 | — | 9 | ||||||||||||||
| Foreign | — | — | — | ||||||||||||||
| Total deferred | 139 | — | 14 | ||||||||||||||
| Total income tax benefit | $ | 135 | $ | — | $ | 40 | |||||||||||
The effective income tax rate for the year ended December 31, 2025 differs from the statutory federal income tax rate presented after the adoption of ASU 2023-09 as follows (in thousands, except percentages):
| Year Ended December 31, 2025 | |||||||||||
| $ | % | ||||||||||
| Provision for income taxes at U.S. federal statutory rate | $ | 73,838 | 21.0 | % | |||||||
| State and local income taxes, net of federal benefit | (98) | (0.0)% | |||||||||
| Foreign tax effects | (677) | (0.2) | % | ||||||||
| Effect of changes in tax laws or rates enacted in the current period | — | — | % | ||||||||
| Tax credits: | |||||||||||
| Research and development credits | 4,020 | 1.1 | % | ||||||||
| Non-taxable or non-deductible items: | |||||||||||
| Equity compensation | (10,428) | (3.0) | % | ||||||||
| Change in fair value of warrants | 10,309 | 2.9 | % | ||||||||
| Change in fair value of related-party convertible note | (8,982) | (2.6) | % | ||||||||
| Other permanent differences | (526) | (0.2) | % | ||||||||
| Valuation allowance | (66,561) | (18.7) | % | ||||||||
| Uncertain tax positions | (285) | (0.1) | % | ||||||||
| Other adjustments: | |||||||||||
| Other | (475) | (0.2) | % | ||||||||
| Total tax benefit and effective tax rate | $ | 135 | — | % | |||||||
As previously disclosed prior to the adoption of ASU 2023-09 (See Note 2 “Summary of Significant Accounting Policies—Recent Accounting Pronouncements”), the effective income tax rate differed from the statutory federal income tax rate as follows:
| Year Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Federal statutory tax rate | 21.0 | % | 21.0 | % | |||||||
| State income taxes, net of federal tax benefit | 5.2 | % | 6.8 | % | |||||||
| Change in fair value of warrants | 1.0 | % | (1.8) | % | |||||||
| Change in fair value of convertible notes | 2.2 | % | (1.3) | % | |||||||
| Investment loss | — | % | 2.1 | % | |||||||
| Tax rate adjustment | 3.9 | % | 1.4 | % | |||||||
| Research and development credits | 2.5 | % | 3.1 | % | |||||||
| Stock-based compensation | (1.1) | % | (1.0) | % | |||||||
| Section 162(m) limitation | (0.5) | % | (0.4) | % | |||||||
| Other | (4.5) | % | 0.3 | % | |||||||
| Valuation allowance | (29.7) | % | (30.2) | % | |||||||
| Effective income tax rate | — | % | — | % | |||||||
The components that comprise our net deferred tax liabilities consist of the following (in thousands):
| As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Net operating loss carryforwards | $ | 567,406 | $ | 475,130 | |||||||
| Section 174 R&E capitalization | 80,058 | 111,598 | |||||||||
| Interest expense | 93,311 | 69,681 | |||||||||
| Research and development credits | 74,485 | 68,070 | |||||||||
| Stock-based compensation | 16,760 | 20,799 | |||||||||
| Operating lease liabilities | 10,549 | 10,886 | |||||||||
| Valuation discount | 4,994 | 6,641 | |||||||||
| Other | 24,630 | 32,604 | |||||||||
| Total deferred tax assets | 872,193 | 795,409 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Debt discount | (7,851) | (9,735) | |||||||||
| Operating lease right-of-use assets | (8,497) | (8,589) | |||||||||
| Indefinite-lived intangible assets | — | (139) | |||||||||
| Total deferred tax liabilities | (16,348) | (18,463) | |||||||||
| Net deferred tax assets | 855,845 | 776,946 | |||||||||
| Valuation allowance | (855,845) | (777,085) | |||||||||
| Net deferred tax liabilities | $ | — | $ | (139) | |||||||
Changes in our valuation allowance are as follows (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Valuation allowance – beginning of year | $ | 777,085 | $ | 648,444 | |||||||
| Allowance taken or written off | 78,162 | 122,845 | |||||||||
| Other adjustment – accumulated paid-in capital | — | 6,365 | |||||||||
| Other adjustment – other comprehensive income (loss) | 598 | (569) | |||||||||
| Valuation allowance – end of year | $ | 855,845 | $ | 777,085 | |||||||
As of December 31, 2025, we have federal NOLs of $2.1 billion, state NOLs of $2.3 billion, and foreign NOLs of $22.0 million. Of the $2.1 billion in federal NOLs, $1.7 billion do not expire and will be able to be used to offset 80% of taxable income in future years. Of the $2.3 billion in state NOLs, $76.3 million do not expire and will be able to be used to offset 80% of taxable income in future years. The remaining federal NOL carryforwards expire beginning in 2026, the remaining state NOL carryforwards expire beginning in 2028, the foreign NOL carryforwards expire beginning in 2026.
In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some or all of our deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the level of historical operating results and the uncertainty of economic conditions, we recorded a valuation allowance of $855.8 million and $777.1 million as of December 31, 2025 and 2024, respectively. During the years ended December 31, 2025 and 2024, the valuation allowance increased by $78.7 million and $128.7 million, respectively, which was mainly driven by losses from which we cannot benefit. The portion of the valuation allowance for deferred tax assets for which subsequently recognized tax benefits will be credited directly to contributed capital is $0.2 million. The company’s valuation allowance as of December 31, 2025 increased compared to December 31, 2024 primarily due to losses from which the company cannot benefit.
Pursuant to Sections 382 and 383 of the Code, annual use of our net operating loss and research and development credit carryforwards may be limited in the event a cumulative change in ownership of more than 50% occurs within a three-year period. We have not recognized the deferred tax assets for federal and state NOLs and credits of $267.5 million from our deferred tax asset schedules as of December 31, 2025 due to Section 382/383 limitations. There is no impact to tax expense for the derecognition of net operating losses, and federal and state research and development credits due to the valuation allowance recorded against our deferred tax assets.
As of December 31, 2025, we also had federal research tax credit carryforwards of $59.6 million and state research tax credits of $39.7 million. The federal research tax credit carryforwards expire beginning in 2032 and certain state research tax credit carryforwards expire beginning in 2030. Our California research tax credits can be carried forward indefinitely. As of December 31, 2025, we also had federal other tax credits carryforwards of $1.3 million and the tax credit carryforwards expire beginning in 2036.
Net operating losses and tax credits are also limited when there is a SRLY. These rules generally limit the use of the acquired or departing members’ net operating loss and tax credit carryovers to the amount of taxable income such entity contributes to consolidated taxable income. The 80% limitation also applies to SRLY NOL carryovers and tax credits. Therefore, any SRLY NOLs and tax credits will be subject to this limitation, as well as Section 382 and 383 limitations.
As of December 31, 2025 and 2024, we have $389.4 million and $287.5 million of interest, respectively, that is temporarily disallowed pursuant to Section 163(j) of the Code. This interest can be carried forward indefinitely and will be deductible when the company generates sufficient adjusted taxable income.
The table below provides the updated requirements of ASU 2023-09 for 2025. See Note 2 “Summary of Significant Accounting Policies” for additional details on the adoption of ASU 2023-09.
A summary of changes to the amount of unrecognized tax benefits is as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Unrecognized tax benefits, beginning of year | $ | 34,543 | $ | 35,470 | $ | 16,252 | |||||||||||
| Additions based on tax positions related to the current year | 1,048 | 1,251 | 18,976 | ||||||||||||||
| Additions based on tax positions related to prior years | — | — | 242 | ||||||||||||||
| Reductions for tax positions of prior years | (15,255) | (2,178) | — | ||||||||||||||
| Unrecognized tax benefits, end of year | $ | 20,336 | $ | 34,543 | $ | 35,470 | |||||||||||
Included in the balance of unrecognized tax benefits as of December 31, 2025 is $17.0 million that, if recognized, would not impact our income tax benefit or effective tax rate as long as the deferred tax asset remains subject to a full valuation allowance. Due to the existence of the valuation allowance, future changes in our unrecognized tax benefits will not impact our effective tax rate. We have not incurred any material interest or penalties as of the current reporting date with respect to income tax matters.
The company files income tax returns in the U.S., California, other states, and foreign jurisdictions. Due to the company’s losses incurred, the company is essentially subject to income tax examination by tax authorities from inception to date. The company’s policy is to recognize interest expense and penalties related to income tax matters as tax expense. As of December 31, 2025, there are no significant accruals for interest related to unrecognized tax benefits or tax penalties.
Upon the prospective adoption of ASU 2023-09 we are required to disclose income taxes paid, net of refunds for 2025. All amounts for federal, state and foreign are zero for the year ended December 31, 2025.
One Big Beautiful Bill Act
On July 4, 2025, the OBBB Act was enacted in the U.S. The OBBB Act includes significant provisions, such as the permanent extension of certain expiring provisions of the TCJA, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The company has evaluated the OBBB Act and estimated the impact to the consolidated financial statements will not be adverse. We will continue to evaluate the full impact of these legislative changes as additional guidance becomes available.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 23, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
| 2023 | Mar 19, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
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.