(9) Taxes on Income

Earnings (loss) before taxes on income and details of the provision (benefit) for taxes on income were as follows (in thousands):


	Year Ended December 31,
	2025		2024			2023
Earnings (loss) before taxes on income:
United States	$	471,286	$	363,563		$	293,011
Foreign		126		(800	)		1,114
	$	471,412	$	362,763		$	294,125

Provision (benefit) for taxes on income:
U.S. Federal:
Current	$	25,282	$	36,520		$	(41	)
Deferred		73,958		41,548			61,205
	$	99,240	$	78,068		$	61,164
U.S. State:
Current	$	8,141	$	7,886		$	5,498
Deferred		8,497		(10,160	)		4,093
	$	16,638	$	(2,274	)	$	9,591
Foreign:
Current	$	119	$	73		$	465
	$	119	$	73		$	465
Consolidated:
Current	$	33,542	$	44,479		$	5,922
Deferred		82,455		31,388			65,298
	$	115,997	$	75,867		$	71,220

In April 2023, the Company received a federal income tax refund of $70.4 million plus accrued interest.

Tax reform legislation in Louisiana was signed in December 2024 that included reducing the corporate income tax rate from 7.5% to 5.5% effective January 1, 2025. As a result of the new legislation, the Company recognized a one-time deferred tax benefit of $10.9 million in the 2024 fourth quarter due to the remeasurement of the Company’s Louisiana and U.S. deferred tax assets and liabilities based on the new effective Louisiana state income tax rate.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. The legislation included several significant U.S. income tax provisions that helped reduce the Company’s U.S. federal cash tax payments in 2025. These provisions include 100% bonus tax depreciation and domestic research and development cost expensing.

The Company’s provision (benefit) for taxes on income varied from the statutory federal income tax rate due to the following:


	Year Ended December 31,
	2025						2024						2023
	Amount			Percent			Amount			Percent			Amount			Percent
United States income tax statutory rate	$	99,014			21.0	%	$	76,182			21.0	%	$	61,783			21.0	%
State and local taxes, net of federal income tax effect (a)		13,276			2.8			(2,078	)		(0.6	)		7,499			2.5
Foreign taxes		119			—			73			—			465			0.2
Tax credits		(495	)		(0.1	)		(2,080	)		(0.5	)		(2,161	)		(0.7	)
Nontaxable or nondeductible items		3,713			0.8			2,620			0.7			3,020			1.0
Changes in unrecognized tax benefits		370			0.1			1,150			0.3			614			0.2
	$	115,997			24.6	%	$	75,867			20.9	%	$	71,220			24.2	%

(a)

The states, that in aggregate, accounted for over 50 percent of the effect of the state and local income taxes shown above were Louisiana, Texas, Florida, and New York for 2025, Louisiana for 2024, and Louisiana and New York for 2023.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities were as follows (in thousands):


	December 31,
	2025			2024
Deferred tax assets:
Allowance for doubtful accounts	$	1,461		$	1,492
Inventory		14,329			20,872
Insurance accruals		5,754			5,523
Deferred compensation		7,027			5,718
Unrealized gain on defined benefit plans		(23,712	)		(19,900	)
Goodwill and other intangibles		14,088			26,888
Operating loss carryforwards		22,000			21,369
Retirement benefits		(1,541	)		1,801
Other		3,611			20,178
		43,017			83,941
Valuation allowances		(14,981	)		(13,667	)
		28,036			70,274
Deferred tax liabilities:
Property		(751,343	)		(717,808	)
Deferred state taxes		(87,060	)		(78,633	)
Other		(16,006	)		(13,305	)
		(854,409	)		(809,746	)
	$	(826,373	)	$	(739,472	)

During 2025, the Company generated federal taxable income which was partially offset by research and development tax credits. During 2024, the Company generated federal taxable income which was partially offset by federal net operating loss carryforwards. The Company had no research and development and federal operating loss deferred tax assets at December 31, 2025 and 2024.

The Company had state operating loss deferred tax assets of $17.1 million and $16.6 million at December 31, 2025 and 2024, respectively. The valuation allowance for state deferred tax assets as of December 31, 2025 and 2024 was $10.0 million and $8.9 million, respectively, related to the Company’s state net operating loss carryforwards based on the Company’s determination that it is more likely than not that the deferred tax assets will not be realized. Expiration of these state net operating loss carryforwards vary by state through 2032 and none will expire in fiscal 2026.

As of December 31, 2025 and 2024, the Company had a Canadian net operating loss carryforward of $4.9 million which expires between 2037 and 2045. A full valuation allowance has been provided for this asset.

The Company or one of its subsidiaries files income tax returns in the United States federal jurisdiction and various state jurisdictions. With few exceptions, the Company and its subsidiaries’ state income tax returns are open to audit under the statute of limitations for the 2019 through 2024 tax years.

As of December 31, 2025, the Company has provided a liability of $2.4 million for unrecognized tax benefits related to various income tax issues which includes interest and penalties. The amount that would impact the Company’s effective tax rate, if recognized, is $2.2 million, with the difference between the total amount of unrecognized tax benefits and the amount that would impact the effective tax rate being primarily related to the federal tax benefit of state income tax items and federal research and development tax credits. It is not reasonably possible to determine if the liability for unrecognized tax benefits will significantly change prior to December 31, 2026 due to the uncertainty of possible examination results.

The Company accounts for interest and penalties related to uncertain tax positions as part of its provision for federal and state income taxes. The Company had $0.3 million and $0.2 million of accrued liabilities for the payment of interest and penalties at December 31, 2025 and 2024, respectively.

The following table summarizes income taxes paid (net of refunds received) (in thousands):


	Year Ended December 31,
	2025		2024		2023
U.S. Federal	$	73,400	$	12,000	$	(70,443	)
U.S. State:
Colorado	*			1,378	*
New York	*			1,240	*
Other		10,260		4,549		4,465
Foreign		336		400		191
	$	83,996	$	19,567	$	(65,787	)

* Indicates amount of income taxes paid (net of refunds received) did not meet 5% disaggregation threshold.

Historical Timeline

Fiscal Year	Filed
2025	Feb 17, 2026	Showing above
2024	Feb 18, 2025

2019	Feb 24, 2020

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.

KIRBY CORP Income Taxes Disclosure

Historical Timeline

About Income Taxes Disclosures

Other Available Disclosures