LAMAR ADVERTISING CO/NEWLAMR
LAMAR ADVERTISING CO/NEW Income Taxes Disclosure
Income Taxes
Commencing January 1, 2014, the Company began operating as a REIT for U.S. income tax purposes. Since operating as a REIT, the Company filed, and intends to continue to file, as a REIT, and its TRSs filed, and intend to continue to file, as C corporations. The Company also files tax returns in various states and countries. The Company’s state tax returns reflect different combinations of the Company’s subsidiaries and are dependent on the connection each subsidiary has with a particular state. The following information pertains to the Company’s income taxes on a consolidated basis.
Income tax expense (benefit) consists of the following:
| Current | Deferred | Total | |||||||||||||||
Year ended December 31, 2025 | |||||||||||||||||
| U.S. federal | $ | 27,473 | $ | (6,686) | $ | 20,787 | |||||||||||
| State and local | 1,224 | (855) | 369 | ||||||||||||||
| Foreign | 253 | (82) | 171 | ||||||||||||||
| $ | 28,950 | $ | (7,623) | $ | 21,327 | ||||||||||||
Year ended December 31, 2024 | |||||||||||||||||
| U.S. federal | $ | 5,942 | $ | 945 | $ | 6,887 | |||||||||||
| State and local | 2,277 | 366 | 2,643 | ||||||||||||||
| Foreign | 348 | (5,347) | (4,999) | ||||||||||||||
| $ | 8,567 | $ | (4,036) | $ | 4,531 | ||||||||||||
Year ended December 31, 2023 | |||||||||||||||||
| U.S. federal | $ | 6,223 | $ | 1,280 | $ | 7,503 | |||||||||||
| State and local | 2,035 | (26) | 2,009 | ||||||||||||||
| Foreign | (860) | 1,130 | 270 | ||||||||||||||
| $ | 7,398 | $ | 2,384 | $ | 9,782 | ||||||||||||
The year ended December 31, 2025 includes an expense of $21,172 in current income tax expense and a benefit of $(7,791) in deferred income tax (benefit) related to the sale of our investment in Vistar Media, Inc.
As of December 31, 2025 and 2024, the Company had income taxes receivable of $1,329 and $2,104, respectively, which was recorded within other current assets on the Consolidated Balance Sheets. As of December 31, 2025 and 2024, the Company had income taxes payable of $742 and $199, respectively, which was recorded within accrued expenses on the Consolidated Balance Sheets.
The U.S. and foreign components of earnings (loss) before income taxes are as follows:
| 2025 | 2024 | 2023 | |||||||||||||||
| U.S. | $ | 622,711 | $ | 368,924 | $ | 509,040 | |||||||||||
| Foreign | (8,316) | (1,454) | (2,422) | ||||||||||||||
| Total | $ | 614,395 | $ | 367,470 | $ | 506,618 | |||||||||||
A reconciliation of significant differences between the reported amount of income tax expense and the expected amount of income tax expense that would result from applying the U.S. federal statutory income tax rate of 21 percent to income before taxes for the December 31, 2025, 2024 and 2023 tax years is as follows:
| 2025 | |||||||||||
| Amount | Percent | ||||||||||
| U.S. federal statutory rate | $ | 129,023 | 21.00 | % | |||||||
State and local income taxes, Net of federal income tax effect(1) | 1,301 | 0.21 | % | ||||||||
| Foreign tax effects | |||||||||||
| Other foreign jurisdictions | 1,921 | 0.31 | % | ||||||||
| Changes in valuation allowances | 514 | 0.08 | % | ||||||||
| Nontaxable or nondeductible items | 1,370 | 0.22 | % | ||||||||
| Changes in unrecognized tax benefits | (1,504) | (0.24) | % | ||||||||
| Other adjustments | |||||||||||
| Tax adjustment related to REIT | (111,318) | (18.11) | % | ||||||||
| Other | 20 | — | % | ||||||||
| Effective tax rate | $ | 21,327 | 3.47 | % | |||||||
(1) For the year ended December 31, 2025, state and local taxes in Texas, Louisiana, Oregon, Florida, and Wisconsin made up the majority (greater than 50%) of the tax effect in this category.
| 2024 | 2023 | ||||||||||
| Income tax expense at U.S. federal statutory rate | $ | 77,166 | $ | 106,390 | |||||||
Tax adjustment related to REIT(1) | (76,410) | (101,486) | |||||||||
| State and local income taxes, net of federal income tax benefit | 2,522 | 2,732 | |||||||||
| Book expenses not deductible for tax purposes | 2,401 | 2,574 | |||||||||
| Stock-based compensation | 4,814 | 513 | |||||||||
Valuation allowance(2) | 548 | 875 | |||||||||
Undistributed earnings of foreign subsidiaries(3) | (55) | (95) | |||||||||
| Jurisdictional tax rate change | (5,417) | — | |||||||||
| Other differences, net | (1,038) | (1,721) | |||||||||
| Income tax expense | $ | 4,531 | $ | 9,782 | |||||||
(1)Includes dividend paid deduction of $121,466 and $107,137 for the tax years ended December 31, 2024 and 2023, respectively.
(2)For the year ended December 31, 2024, a non-cash valuation allowance of $548 was recorded to income tax expense due to our limited ability to utilize Canada deferred tax assets in future years. For the year ended December 31, 2023, a non-cash valuation allowance of $875 was recorded to income tax expense due to our limited ability to utilize Puerto Rico and Canada deferred tax assets in future years.
(3)Management does not assert that the undistributed earnings of our Canadian subsidiaries will be permanently reinvested. For the years ended December 31, 2024 and 2023, we recognized a deferred tax benefit of $55 and $95, respectively, for future foreign withholding taxes related to undistributed earnings.
The tax effect of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are presented below:
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Allowance for doubtful accounts | $ | 287 | $ | 222 | |||||||
| Net operating loss carry forwards | 3,483 | 3,637 | |||||||||
| Tax credit carry forwards | 514 | 514 | |||||||||
| Intangibles | 1,778 | 785 | |||||||||
| Investment in partnerships | 3,865 | — | |||||||||
| Lease liabilities | 1,264 | — | |||||||||
| Gross deferred tax assets | 11,191 | 5,158 | |||||||||
| Less: valuation allowance | (6,969) | (3,402) | |||||||||
| Net deferred tax assets | 4,222 | 1,756 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Accrued liabilities not deducted for tax purposes | (1,948) | (2,214) | |||||||||
| Investment in partnerships | — | (3,940) | |||||||||
| Property, plant and equipment | (446) | (2,900) | |||||||||
| Undistributed earnings of foreign subsidiaries | (748) | (708) | |||||||||
| Right of use asset | (1,497) | — | |||||||||
| Gross deferred tax liabilities | (4,639) | (9,762) | |||||||||
| Net deferred tax liabilities | $ | (417) | $ | (8,006) | |||||||
| Classification in the consolidated balance sheet: | |||||||||||
| Noncurrent deferred tax assets | $ | 332 | $ | — | |||||||
| Noncurrent deferred tax liabilities | (749) | $ | (8,006) | ||||||||
| Net deferred tax liabilities | $ | (417) | $ | (8,006) | |||||||
As of December 31, 2025, we have approximately $8,842 of U.S. net operating loss carryforwards to offset future taxable income. Of this amount, $8,627 is subject to Internal Revenue Code §382 limitation but will be available to be fully utilized by no later than 2027. These carry forwards expire between 2032 through 2037.
As of December 31, 2025, we have approximately $795 of U.S. tax credit carryforwards before valuation allowances available to offset future federal income tax. These federal tax credit carry forwards expire between 2026 through 2031.
As of December 31, 2025, we have approximately $1,130,403 of state net operating loss carryforwards before valuation allowances. These state net operating losses are available to reduce future taxable income and expire at various times and amounts. In addition, we have $29 of various credits available to offset future state income tax.
As of December 31, 2025, we had approximately $11,260 of Canadian net operating loss carry forwards before valuation allowances. These Canadian net operating losses are available to offset future taxable income. These carry forwards expire between 2027 and 2045.
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in those jurisdictions during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carry back and carry forward periods), projected future taxable income, and tax-planning strategies in making this assessment. In order to fully realize the deferred tax assets, the Company will need to generate future taxable income before the expiration of the carry forwards governed by the tax code. Based on the current level of pretax earnings, the Company will not generate the minimum amount of future taxable income to support the realization of the deferred tax assets. As a result, management has determined that a valuation allowance related to Canada net operating loss carry forwards and other deferred tax assets is necessary. The valuation allowance for Canadian deferred tax assets as of December 31, 2025 and 2024 was $6,068 and $3,402, respectively. For this same reason, there was also a valuation allowance for U.S. deferred tax assets related to federal tax credits and state net operating loss carry forwards necessary as of December 31, 2025. As of December 31, 2025, the valuation allowance for U.S. deferred tax assets related to federal tax credits and state net operating loss carry forwards was $514 and $386, respectively. The net change in the total valuation allowance for the years ended December 31, 2025 and 2024 was an increase of $3,567 and a decrease of ($1,931), respectively. The amount of the deferred tax asset considered realizable, however, could be adjusted in the near term if estimates of future taxable income during the carry forward period increase.
As of December 31, 2025, the Company has accumulated undistributed earnings generated by our foreign subsidiaries of approximately $14,976. Management does not designate these earnings as permanently reinvested and has recognized a deferred tax liability of approximately $748 related to foreign withholding taxes on these earnings. We have recognized a current year tax expense of $6 related to December 31, 2025 earnings.
Under ASC 740, Income Taxes, we provide for uncertain tax positions, and the related interest, and adjust recognized tax benefits and accrued interest accordingly. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
Balance as of December 31, 2022 | $ | 5,544 | |||
| Additions for tax positions related to prior years | 703 | ||||
| Lapse of statute of limitations | (1,815) | ||||
Balance as of December 31, 2023 | $ | 4,432 | |||
| Additions for tax positions related to current year | 71 | ||||
| Additions for tax positions related to prior years | 317 | ||||
| Reductions for tax positions related to prior years | (1,396) | ||||
| Lapse of statute of limitations | (798) | ||||
Balance as of December 31, 2024 | $ | 2,626 | |||
| Additions for tax positions related to current year | 33 | ||||
| Additions for tax positions related to prior years | 24 | ||||
| Reductions for tax positions related to prior years | (1) | ||||
| Lapse of statute of limitations | (1,560) | ||||
Balance as of December 31, 2025 | $ | 1,122 | |||
As of December 31, 2025, 2024 and 2023, there are $1,122, $2,626, and $4,432 of unrecognized tax benefits that, if recognized would impact our effective tax rate. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. During the year ended December 31, 2025, we recognized a benefit to interest and penalties of $677. During the year ended December 31, 2024, we recognized a benefit to interest and penalties of $71. During the year ended December 31, 2023, we recognized $76 of expense in interest and penalties. The Company had $648 and $1,325 of interest and penalties accrued at December 31, 2025 and 2024, respectively.
We are subject to income taxes in the U.S. and nearly all states. In addition, the Company is subject to income taxes in Canada and was subject to income taxes in the Commonwealth of Puerto Rico prior to the year ended December 31, 2025. We are no longer subject to U.S. federal income tax examinations by tax authorities for years prior to 2022, or for any U.S. state income tax audit prior to 2021. With respect to Canada and Puerto Rico, we are no longer subject to income tax audits for years before 2022 and 2021, respectively.
As of January 1, 2024, we and our subsidiaries are subject to the OECD Pillar Two Rules. The Pillar Two Rules can potentially lead to additional taxes when the effective tax rate (as defined by the Pillar Two Rules) in a jurisdiction is below 15%. While it is uncertain whether the U.S. will enact Pillar Two legislation, Canada, where the Company operates, has enacted Pillar Two legislation. The Pillar Two Rules, however, do not apply to “Excluded Entities” considered “Real Estate Investment Vehicles” and certain subsidiaries of Excluded Entities. The majority of our entities qualify as excluded entities.
For those entities not considered Excluded Entities, Pillar Two did not have a material impact on the Company’s effective tax rate or the Company’s Consolidated Statements of Operations and Comprehensive Loss.
Income taxes paid (net of refunds received) are presented below:
| 2025 | |||||
| U.S. federal | $ | 26,565 | |||
| U.S. State and local - other | 2,155 | ||||
| Foreign - other | 382 | ||||
| Total | $ | 29,102 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 20, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 20, 2020 | |
| 2018 | Feb 25, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Feb 25, 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.