LanzaTech Global, Inc.LNZA
LanzaTech Global, Inc. Income Taxes Disclosure
Income Taxes
The Company is subject to federal and state income taxes in the United States, as well as income taxes in foreign jurisdictions in which it conducts business. The Company does not provide for federal income taxes on the undistributed earnings of its foreign subsidiaries as such earnings are reinvested indefinitely. The Company and its foreign subsidiaries have historically been loss generating entities that have resulted in no excess earnings to consider for repatriation and accordingly there were no deferred income taxes recognized for the years ended December 31, 2025 and 2024.
The Company recorded no income tax expense for the years ended December 31, 2025 and 2024, representing an effective tax rate of 0%. The difference between the U.S. federal statutory rate of 21% and the Company's effective tax rate in the years ended December 31, 2025 and 2024 was primarily due to a full valuation allowance related to the Company's U.S. and foreign deferred tax assets. The Company reassesses the need for a valuation allowance on a quarterly basis. If it is determined that a portion or all of the valuation allowance is not required, it will generally be a benefit to the income tax provision in the period such determination is made.
The Company conducts business in multiple jurisdictions within and outside the United States. Consequently, the Company is subject to periodic income tax examinations by domestic and foreign income tax authorities. The Company is subject to audits for tax years 2019 and onward for federal purposes. There are tax years which remain subject to examination in various other state and foreign jurisdictions that are not material to the Company's financial statements.
The components of loss before income taxes, net are as follows (in thousands):
Years Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
United States | $ | (44,717) | $ | (136,223) | |||||||
Foreign | (4,234) | (1,508) | |||||||||
Total | $ | (48,951) | $ | (137,731) | |||||||
The Company does not have any current or deferred taxes in either the United States or its foreign operations.
We adopted ASU 2023-09, Improvements to Income Tax Disclosures, prospectively. A reconciliation of the U.S. federal statutory income tax rate to our effective tax rate pursuant to the disclosure requirements of ASU 2023-09 is as follows (in thousands, expect percentages):
Year Ended December 31, | |||||||||||
2025 | |||||||||||
Income tax (benefit) at the statutory federal income tax rate | $ | (10,280) | 21.0 | % | |||||||
| State and local taxes | |||||||||||
| State and local taxes | (2,228) | 4.6 | % | ||||||||
| Valuation allowance | 2,228 | (4.6) | % | ||||||||
Foreign tax effects | |||||||||||
Netherlands | |||||||||||
Foreign tax rate differential | (181) | 0.4 | % | ||||||||
Valuation allowance | 974 | (2.0) | % | ||||||||
Other foreign jurisdictions | 97 | (0.2) | % | ||||||||
Valuation allowance | 7,107 | (14.5) | % | ||||||||
Nondeductible or nontaxable items | |||||||||||
Nondeductible loss on stock | 1,111 | (2.3) | % | ||||||||
Share-based compensation | 1,085 | (2.2) | % | ||||||||
Other | 87 | (0.2) | % | ||||||||
Total income tax expense (benefit) | — | — | % | ||||||||
The following table is a reconciliation of income taxes computed at the statutory federal income tax rate (21.0% federal income tax rate in the United States for 2024) to the income tax expense (benefit) reflected in the consolidated statement of operations and comprehensive loss (in thousands, except percentages):
Year Ended December 31, | |||||||||||
2024 | |||||||||||
Income tax (benefit) at the statutory federal income tax rate | $ | (28,924) | 21.0 | % | |||||||
Foreign tax rate differential | 102 | (0.1) | % | ||||||||
State and local taxes | (12,148) | 8.8 | % | ||||||||
Share Based Compensation | 547 | (0.4) | % | ||||||||
Nondeductible loss on stock | 1,126 | (0.8) | % | ||||||||
Valuation allowance | 34,544 | (25.1) | % | ||||||||
Expiring NOLs | 1,109 | (0.8) | % | ||||||||
Other | 3,644 | (2.6) | % | ||||||||
Total income tax expense (benefit) | $ | — | — | % | |||||||
Deferred Taxes
Significant components of deferred tax assets and liabilities were as follows (in thousands):
| Years Ended December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Deferred tax assets: | ||||||||||||||
| Net operating loss and credit carryforwards | $ | 178,709 | $ | 150,372 | ||||||||||
| Stock-based compensation | 6,850 | 6,636 | ||||||||||||
| Operating lease liability | 5,156 | 9,551 | ||||||||||||
| Accrued expenses | 82 | 168 | ||||||||||||
| Deferred revenue | 125 | 203 | ||||||||||||
| Equity method investment | 1,213 | 3,875 | ||||||||||||
| R&D capitalization | 26,752 | 38,517 | ||||||||||||
| Other | 1,383 | 4,357 | ||||||||||||
Total deferred tax assets | 220,270 | 213,679 | ||||||||||||
| Valuation allowance | (215,942) | (205,566) | ||||||||||||
Total net deferred tax asset | 4,328 | 8,113 | ||||||||||||
| Deferred tax liabilities: | ||||||||||||||
| Operating lease asset | (4,328) | (8,113) | ||||||||||||
| Other | — | — | ||||||||||||
| Total deferred tax liabilities | (4,328) | (8,113) | ||||||||||||
Net deferred income tax assets and liabilities | $ | — | $ | — | ||||||||||
At December 31, 2025 and 2024, the Company had $561,099 and $456,014, respectively, of tax losses and credits carried forward subject to shareholder continuity and acceptance in the countries where the Company has tax losses carried forward. R&D tax credits included within these amounts are $35,111 and $35,111 for the respective periods, which may be available to offset future income tax liabilities. At December 31, 2025 and 2024, the net operating loss and credit carryforwards were comprised of $469,278 and $376,507 in the United States,$41,833 and $34,019 in state and local jurisdictions, $49,481 and $45,456 in foreign jurisdictions, respectively. At December 31,
2025 and 2024, the Company had net operating loss carryforwards of approximately $155,787 and $148,511, respectively, that expire in various years from 2026 through 2045, plus $370,202 and $272,391, respectively, for which there is no expiration date.
Section 382 of the Internal Revenue Code imposes an annual limitation on the utilization of net operating loss carryforwards based on a statutory rate of return and the value of the corporation at the time of a “change of ownership” as defined by Section 382. The Company had a change in ownership in November 2014. Therefore, the Company’s ability to utilize its net operating loss carryforwards incurred prior to the 2014 ownership change, will be subject in future periods to annual limitations.
In assessing the realizability of deferred tax assets, the Company assesses whether it is more-likely-than-not that a portion or all of the deferred tax assets will not be realized. The Company considers the scheduled reversal of deferred tax liabilities, tax planning strategies and projected future taxable income in making this assessment. At December 31, 2025 and 2024, a valuation allowance of $215,942 and $205,566, respectively, was recorded against certain deferred tax assets based on this assessment. The Company believes it is more-likely-than-not that the tax benefit of the remaining net deferred tax assets will be realized. The amount of net deferred tax assets considered realizable could be increased or reduced in the future if the Company’s assessment of future taxable income or tax planning strategies changes.
The Company and its foreign subsidiaries have historically been loss generating entities that have resulted in no excess earnings to consider for repatriation and accordingly there were no deferred income taxes recognized as of December 31, 2025 and 2024.
At December 31, 2025 and 2024, the Company had no tax liability or benefit related to uncertain tax positions. No interest or penalties related to uncertain taxes have been recognized on the accompanying consolidated statements of operations. Management does not expect a significant change in uncertain tax positions during the twelve months subsequent to December 31, 2025.
The Company conducts business in multiple jurisdictions within and outside the United States. Consequently, the Company is subject to periodic income tax examinations by domestic and foreign income tax authorities. During December 2021, the Internal Revenue Service completed an income tax examination of the Company’s U.S. federal income tax return for the year ended December 31, 2016, which resulted in no impact to the Company’s consolidated financial statements. The Company has no other ongoing tax examinations with domestic or foreign taxing authorities.
In July 2025, the One Big Beautiful Bill Act (OBBBA) was enacted. Key income tax-related provisions of the OBBBA include the repeal of mandatory capitalization of research and development expenditures under Internal Revenue Code Section 174, extension of bonus depreciation, and revisions to international tax regimes. The Company recognized the impacts of OBBBA as part of its 2025 financial statements while maintaining a full valuation allowance.
The OECD has issued a framework for a global minimum tax (Pillar Two), and certain jurisdictions have enacted related legislation. At this time, we do not expect the adoption of such legislation to have a material effect on our results of operations, financial position or cash flows.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2024 | Apr 15, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 29, 2023 | |
| 2021 | Mar 25, 2022 | |
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.