LIVE VENTURES IncLIVE
LIVE VENTURES Inc Income Taxes Disclosure
Note 16: Income Taxes
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
Income tax expense for the years ended September 30, 2025 and 2024 is as follows (in $000’s):
| Year Ended September 30, 2025 | Year Ended September 30, 2024 | ||||||||||
| Current expense: | |||||||||||
| Federal | $ | 2,411 | $ | 1,696 | |||||||
| State | 361 | 528 | |||||||||
| 2,772 | 2,224 | ||||||||||
Deferred expense (benefit): | |||||||||||
| Federal | 2,443 | (5,311) | |||||||||
| State | 445 | (1,571) | |||||||||
| 2,888 | (6,882) | ||||||||||
Total income tax (benefit) expense | $ | 5,660 | $ | (4,658) | |||||||
A reconciliation of the differences between the effective and statutory income tax rates for years ended September 30, 2025 and 2024:
| Year Ended September 30, 2025 | Year Ended September 30, 2024 | ||||||||||
| Federal statutory rates | 21.0 | % | (21.0 | %) | |||||||
| State income taxes, net of federal benefit | 5.6 | % | (6.2 | %) | |||||||
Goodwill impairment | — | % | 8.8 | % | |||||||
Non-taxable income | (2.6 | %) | — | % | |||||||
| Permanent differences | 0.2 | % | 0.1 | % | |||||||
Investments | — | % | 4.6 | % | |||||||
| Stock compensation | 0.5 | % | — | % | |||||||
Change in tax rates | (0.6 | %) | 3.6 | % | |||||||
Tax credits | (0.3 | %) | (0.2) | % | |||||||
| Change in valuation allowance | 0.4 | % | (4.4) | % | |||||||
| Other | (4.3) | % | (0.4 | %) | |||||||
| Effective rate | 19.9 | % | (15.2 | %) | |||||||
At September 30, 2025 and 2024, deferred income tax assets and liabilities were comprised of (in $000’s):
| September 30, 2025 | September 30, 2024 | ||||||||||
| Deferred income tax assets (liabilities): | |||||||||||
| Allowance for bad debts | $ | 149 | $ | 192 | |||||||
Accrued expenses/reserves | 4 | 24 | |||||||||
| Inventory | 2,201 | 2,594 | |||||||||
| Accrued compensation | 200 | 197 | |||||||||
Research and development | 496 | 564 | |||||||||
| Net operating loss | 2,203 | 2,320 | |||||||||
| Tax credits | 581 | 508 | |||||||||
| Stock compensation | 144 | 247 | |||||||||
| Intangibles | (10,394) | (4,972) | |||||||||
| Property & equipment | (10,997) | (12,544) | |||||||||
| Right of use assets | (14,113) | (15,201) | |||||||||
| Lease liabilities | 15,381 | 17,192 | |||||||||
Interest carryforwards | 7,321 | 4,827 | |||||||||
Subtotal income tax assets (liabilities) | (6,824) | (4,052) | |||||||||
| Less: Valuation allowance | (2,332) | (2,215) | |||||||||
Total deferred income tax liability | $ | (9,156) | $ | (6,267) | |||||||
The Company has federal and state net operating loss carryforwards of approximately $7.4 million and $9.1 million, respectively, as of September 30, 2025. The Company has placed a valuation allowance of approximately $6.3 million on the federal net operating loss carryforward due to Internal Revenue Code Section ("IRC Sec.") 382 limitations. Additionally, the Company has placed a full valuation allowance against their state net operating loss carryforwards due to separate return limitations. The Company has IRC Sec. 163(j) interest carryforwards of approximately $27.6 million as of September 30, 2025, which have an indefinite carryforward period. The Company has state tax credit carryforwards as of September 30, 2025 of approximately $0.7 million. For the year ended September 30, 2025, the Company received approximately $2.1 million in Employer Retention Credit refunds related to the 2020 and 2021 calendar years. These refunds were recorded as other income in the Company’s consolidated statements of income (loss) for the year ended September 30, 2025.
The Company evaluates all available evidence to determine if a valuation allowance is needed to reduce its deferred tax assets. Management has concluded that it is more likely than not that a portion of its existing tax benefits will not be realized. Accordingly, the Company has recorded a valuation allowance of approximately $2.3 million at September 30, 2025 to reduce its deferred tax assets.
The Company annually conducts an analysis of its tax positions and has concluded that it has no uncertain tax positions as of September 30, 2025. The Company is currently not under audit in any jurisdictions. The 2020 through 2023 tax years are open to examination by the various federal and state jurisdictions in which the Company operates. The Company’s policy is to record uncertain tax positions as a component of income tax expense.
On July 4, 2025, the One Big Beautiful Bill Act was enacted, making permanent and expanding several corporate tax provisions originally introduced under the Tax Cuts and Jobs Act of 2017. The key changes include, immediate expensing of research and experimentation costs, restoration of EBITDA-based interest deductibility under §163(j), and extension of 100% bonus depreciation through 2030. The Company has evaluated the impact of these provisions and anticipates improvement in near-term cash flows related to income taxes beginning in fiscal year 2026.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Dec 17, 2025 | Showing above |
| 2024 | Dec 19, 2024 | |
| 2023 | Dec 22, 2023 | |
| 2022 | Dec 16, 2022 | |
| 2021 | Dec 28, 2021 | |
| 2020 | Jan 13, 2021 | |
| 2019 | Feb 10, 2020 | |
| 2018 | Dec 27, 2018 | |
| 2016 | Dec 29, 2016 | |
| 2015 | Jan 13, 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.