Lifevantage CorpLFVN
Lifevantage Corp Income Taxes Disclosure
Income Taxes
The income tax expense for the fiscal years ended June 30, 2025 and 2024 consists of the following (in thousands):
Years ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Income before income taxes: | |||||||||||
| Domestic | $ | 10,397 | $ | 2,940 | |||||||
| International | 1,846 | 1,410 | |||||||||
| $ | 12,243 | $ | 4,350 | ||||||||
| Current taxes: | |||||||||||
| Federal | $ | 2,925 | $ | 1,457 | |||||||
| State | 708 | 246 | |||||||||
| Foreign | 491 | 984 | |||||||||
| Total current income tax provision | $ | 4,124 | $ | 2,687 | |||||||
| Deferred taxes: | |||||||||||
| Federal | $ | (1,464) | $ | (1,281) | |||||||
| State | (341) | (151) | |||||||||
| Foreign | 119 | 158 | |||||||||
| Total deferred income tax provision | $ | (1,686) | $ | (1,274) | |||||||
| Net income tax provision | $ | 2,438 | $ | 1,413 | |||||||
The effective income tax rate for the fiscal years ended June 30, 2025 and 2024 differs from the U.S. Federal statutory income tax rate due to the following:
Years ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Federal statutory income tax rate | 21.0 | % | 21.0 | % | |||||||
| State income taxes, net of federal benefit | 3.4 | % | 1.2 | % | |||||||
| Foreign tax rate difference | (0.4) | % | 8.0 | % | |||||||
| Tax return to provision true-up | 0.4 | % | (4.3) | % | |||||||
| Limit on future stock compensation due to 162(m) | 4.0 | % | 2.8 | % | |||||||
| Foreign withholding tax | 0.8 | % | 2.6 | % | |||||||
| Other differences | 0.7 | % | 1.6 | % | |||||||
| Revalue of deferred for change in federal tax rate | 0.0 | % | 0.0 | % | |||||||
| Permanent differences: | |||||||||||
| — stock-based compensation | (6.2) | % | (8.3) | % | |||||||
| — current year section 162(m) limitation | 0.9 | % | 7.0 | % | |||||||
| — foreign derived intangible income deduction | (1.4) | % | (0.7) | % | |||||||
| — tax credits | (4.8) | % | (12.1) | % | |||||||
| — meals and entertainment | 0.6 | % | 1.3 | % | |||||||
— removal of additional permanent reinvestment assertions | 0.6 | % | 1.2 | % | |||||||
— change in uncertain tax positions | (0.4) | % | 1.2 | % | |||||||
— accrual for foreign tax audits | 0.4 | % | 7.7 | % | |||||||
| — other permanent differences | 0.7 | % | 1.8 | % | |||||||
| Change in valuation allowance | (0.4) | % | 0.5 | % | |||||||
| Net income tax provision | 19.9 | % | 32.5 | % | |||||||
The components of the deferred tax assets and liabilities as of June 30, 2025 and 2024 are as follows (in thousands):
| June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Federal, state, and foreign net operating loss carryovers | $ | 234 | $ | 271 | |||||||
| Stock option compensation | 628 | 360 | |||||||||
| Section 174 costs | 2,798 | 2,578 | |||||||||
| Lease liability | 2,798 | 3,223 | |||||||||
| Accrued vacation, allowance for returns, bonuses & other | 2,819 | 2,119 | |||||||||
| Gross deferred tax asset | $ | 9,277 | $ | 8,551 | |||||||
| Deferred tax liabilities: | |||||||||||
| Patents and trademarks | $ | (16) | $ | (30) | |||||||
| Property & equipment | (239) | (798) | |||||||||
| Right of use asset | (1,942) | (2,263) | |||||||||
| Other | (468) | (472) | |||||||||
| Gross deferred tax liabilities | (2,665) | (3,563) | |||||||||
| Less: valuation allowance | (642) | (720) | |||||||||
| Deferred tax assets, net | $ | 5,970 | $ | 4,268 | |||||||
The Company has adopted accounting guidance for uncertain tax positions (“UTPs”) which provides that in order to recognize an uncertain tax benefit, the taxpayer must be more likely than not of sustaining the position. The measurement of the benefit is calculated as the largest amount that is more than 50% likely to be realized upon recognition of the benefit.
In the fiscal year ended June 30, 2024, the Company began recording a withholding tax obligation on certain rebalanced commission payments to the U.S. parent company it had not obtained treaty rates for. The withholding tax recorded in the fiscal year ended June 30, 2024 has been reversed during the fiscal year ended June 30, 2025 as the Company no longer expects to pay that liability.
The Company has been undergoing income tax audits in foreign jurisdictions. For the fiscal year ended June 30, 2025, the Company accrued a total $0.4 million related to foreign income tax audits. In fiscal year 2025, the Company made payments or deemed payments totaling $0.4 million related to these foreign income tax audits. The UTP related to foreign tax audits is now zero. The Company does not have any other foreign tax audits as of June 30, 2025.
The change in the liability for uncertain tax positions were as follows (in thousands):
| Years ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Beginning balance | $ | 389 | $ | — | |||||||
| Gross increases - tax positions in prior year | 51 | — | |||||||||
| Gross decreases - tax positions in prior year | (53) | — | |||||||||
| Gross increases - tax positions in current year | — | 389 | |||||||||
| Settlement | (381) | — | |||||||||
| Currency adjustment | (6) | — | |||||||||
| Ending balance | $ | — | $ | 389 | |||||||
In fiscal year 2022, the Company removed its permanent reinvestment assertion in Japan. In fiscal year 2024, the Company removed its permanent reinvestment assertions in Taiwan and Australia and recorded the tax effects of that change. In fiscal year 2025, the Company removed its permanent reinvestment assertion on all other entities.
The tax years open for examination by the Internal Revenue Service (“IRS”) include returns for fiscal years June 30, 2021 through present and the open tax years by state tax authorities include returns for fiscal years June 30, 2020 through present. In addition, the IRS and state tax authorities may examine net operating losses (“NOLs”) for any previous years if utilized by the Company.
The change in the valuation allowance were as follows (in thousands):
| Years ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Beginning balance | $ | 720 | $ | 704 | |||||||
| Increases | (78) | 16 | |||||||||
| Ending balance | $ | 642 | $ | 720 | |||||||
The change in valuation allowance during the fiscal year ended June 30, 2025 related to current year income in entities with a full valuation allowance along with a change to the United States valuation allowance based on the Company converting from a blended rate to a state-by-state provision. During the fiscal year ended June 30, 2024, the change in valuation allowance related to current year income in entities with a full valuation allowance along with a change to the United States valuation allowance based on updated projections and changes to the blended rate.
As of June 30, 2025, the Company had utilized all of its Federal NOL carry-forwards. As of June 30, 2025, state NOLs were $4.8 million and foreign NOLs were $0.4 million.
The total recognized tax benefit from settlement of stock-based awards for the fiscal years ended June 30, 2025 and 2024, was $0.8 million and $0.2 million, respectively.
The Company has reflected all changes in tax laws including the changes resulting from expiring Tax Cuts and Jobs Act provisions. The Company will reflect the changes from the One Big Beautiful Bill Act in fiscal year 2026, when the law was enacted.
The Company conducts its business globally. As a result, the Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions, and are subject to examination for the open tax years of June 30, 2021 through June 30, 2025.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Sep 4, 2025 | Showing above |
| 2024 | Aug 28, 2024 | |
| 2023 | Aug 28, 2023 | |
| 2022 | Aug 23, 2022 | |
| 2021 | Aug 19, 2021 | |
| 2020 | Aug 18, 2020 | |
| 2019 | Aug 14, 2019 | |
| 2018 | Aug 15, 2018 | |
| 2017 | Sep 7, 2017 | |
| 2016 | Dec 12, 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.