HUNT J B TRANSPORT SERVICES INC Income Taxes Disclosure

6.	Income Taxes

 

Income before provision for income taxes was as follows:

 

		Years ended December 31,
		2025				2024				2023
United States		$	772,284			$	742,432			$	929,054
Foreign			21,828				17,084				5,833
Income before income taxes		$	794,112			$	759,516			$	934,887

 

 

Income tax expense attributable to earnings before income taxes consists of (in thousands):

 

		Years ended December 31,
		2025				2024				2023
Current:
Federal		$	170,563			$	244,770			$	106,004
State and local			7,384				25,328				35,030
Foreign			5,827				8,380				-
			183,774				278,478				141,034
Deferred:
Federal			(2,541	)			(88,016	)			66,000
State and local			14,597				(1,832	)			(434	)
			12,056				(89,848	)			65,566
Total tax expense/(benefit)		$	195,830			$	188,630			$	206,600

 

Income tax expense attributable to earnings before income taxes differed from the amounts computed using the statutory federal income tax rate of 21% for the following reasons (in thousands):

 

		Years ended December 31,
		2025								2024								2023
		Amount				%				Amount				%				Amount				%
U.S. federal statutory rate		$	166,764				21.0	%		$	159,498				21.0	%		$	196,326				21.0	%
State tax, net of federal effect*			32,159				4.1				31,114				4.1				37,594				4.0
Foreign tax Effects			-				-				5,895				0.8				(1,002	)			(0.1	)
Tax credits			(10,043	)			(1.3	)			(1,754	)			(0.2	)			(3,829	)			(0.4	)
Nontaxable or nondeductible items:
Federal 1341 claim			18,090				2.3
Other			6,276				0.8				9,956				1.3				2,476				0.3
Changes in unrecognized tax benefits:			(17,547	)			(2.2	)			(12,648	)			(1.7	)			(21,968	)			(2.4	)
Other, net			131				-				(3,431	)			(0.5	)			(2,997	)			(0.3	)
Effective Tax Rate		$	195,830				24.7	%		$	188,630				24.8	%		$	206,600				22.1	%

 

* State taxes for California, Illinois, Indiana, New York & Pennsylvania for 2025, and California, Illinois, New York & Pennsylvania for 2024 and 2023 made up the majority (greater than 50%) of the tax effect in this category.

 

 

Income taxes receivable was $34.9 million and $116.7 million at December 31, 2025 and 2024, respectively. These amounts have been included in other receivables in our Consolidated Balance Sheets. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2025 and 2024, are presented below (in thousands):

 

		December 31,
		2025				2024
Deferred tax assets:
Insurance accruals		$	83,380			$	69,168
Allowance for doubtful accounts			12,149				12,584
Compensation accrual			15,881				9,882
Deferred compensation accrual			24,484				26,805
Federal benefit of state uncertain tax positions			16,377				17,693
Lease liabilities			60,849				74,858
State NOL carry-forward			2,602				4,235
Other			1,112				3,815
Total gross deferred tax assets			216,834				219,040
Valuation allowance			(2,602	)			(4,235	)
Total deferred tax assets, net of valuation allowance			214,232				214,805
Deferred tax liabilities:
Plant and equipment, principally due to differences in depreciation			1,031,019				1,001,537
Prepaid permits and insurance, principally due to expensing for income tax purposes			31,721				35,592
Lease right-of-use assets			59,797				73,925
Total gross deferred tax liabilities			1,122,537				1,111,054
Net deferred tax liability		$	908,305			$	896,249

 

The amounts of cash income taxes paid by the Company were as follows:

 

	Years Ended December 31,
		2025				2024				2023
Federal		$	101,890			$	275,594			$	97,386
State and local:
California			1,903				2,068				7,037
Illinois			4,848				8,697				14,565
Other			9,099				14,289				14,549
Total State and local			15,850				25,054				36,151
Foreign			5,764				4,455				1,848
Income taxes, net of amounts refunded		$	123,504			$	305,103			$	135,385

 

On July 4, 2025, new U.S. tax legislation was signed into law which made permanent many of the tax provisions enacted in 2017 as part of the Tax Cuts and Jobs Act that were set to expire at the end of 2025. In addition, the legislation made changes to certain U.S. Corporate tax provisions. This new legislation did not have a material impact on our Consolidated Financial Statements.

 

 

Guidance on accounting for uncertainty in income taxes prescribes recognition and measurement criteria and requires that we assess whether the benefits of our tax positions taken are more likely than not of being sustained under tax audits.  We have made adjustments to the balance of unrecognized tax benefits, a component of other long-term liabilities on our Consolidated Balance Sheets, as follows (in millions):

 

		December 31,
		2025				2024				2023
Beginning balance		$	78.0			$	80.9			$	89.1
Additions based on tax positions related to the current year			11.5				13.3				16.2
Additions/(reductions) based on tax positions taken in prior years			(4.7	)			(2.9	)			0.5
Reductions due to settlements			(2.7	)			(1.4	)			(14.6	)
Reductions due to lapse of applicable statute of limitations			(14.4	)			(11.9	)			(10.3	)
Ending balance		$	67.7			$	78.0			$	80.9

 

At December 31, 2025 and 2024, we had a total of $67.7 million and $78.0 million, respectively, in gross unrecognized tax benefits.  Of these amounts, $54.8 million and $63.4 million represent the amount of unrecognized tax benefits that, if recognized, would impact our effective tax rate in 2025 and 2024, respectively.  Interest and penalties related to income taxes are classified as interest expense in our Consolidated Statements of Earnings.  The amount of accrued interest and penalties recognized during the years ended December 31, 2025, 2024, and 2023, was $7.2 million, $7.8 million, and $5.3 million, respectively. Future changes to unrecognized tax benefits will be recognized as income tax expense and interest expense, as appropriate.  The total amount of accrued interest and penalties for such unrecognized tax benefits at December 31, 2025 and 2024, was $13.6 million and $13.1 million, respectively. No material change in unrecognized tax benefits is expected in the next 12 months.

 

Tax years 2020 and forward remain subject to examination by federal tax jurisdictions, while tax years 2018 and forward remain open for state jurisdictions.