MAUI LAND & PINEAPPLE CO INC Income Taxes Disclosure
| 12. | INCOME TAXES |
GAAP prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.
The Company’s provision for income taxes is calculated using the liability method. Deferred income taxes are provided for all temporary differences between the financial statement and income tax bases of assets and liabilities using tax rates enacted by law or regulation.
Reconciliations between the total income tax expense (benefit) and the amount computed using the statutory federal rate of 21% for the years ended December 31, 2025 and 2024 were as follows:
| Year Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| (in thousands) | ||||||||
| Federal income tax expense/(benefit) at statutory rate | (2,222 | ) | 21.0% | (1,595 | ) | |||
| Adjusted for: | ||||||||
| Non-deductible items | 31 | (0.3% | ) | 6 | ||||
| Return to provision adjustments | 1,606 | (15.2% | ) | (372 | ) | |||
| State and local income tax, net of federal income tax effect | (623 | ) | 5.9% | |||||
| Valuation Allowance | 1,208 | (11.4% | ) | 1,961 | ||||
| Income Tax expense/(benefit) | - | N/A | - | |||||
Deferred tax assets were comprised of the following temporary differences as of December 31, 2025 and 2024:
| Year Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Net operating loss and tax credit carryforwards | $ | 26,322 | $ | 24,770 | ||||
| Joint Venture and other investments | (28 | ) | (279 | ) | ||||
| Accrued retirement benefits and other compensation | 3,295 | 2,728 | ||||||
| Property net book value | 2,015 | 3,042 | ||||||
| Deferred Revenue | 1,005 | 1,051 | ||||||
| Reserves and other | (60 | ) | 29 | |||||
| Total Deferred Tax Assets | 32,549 | 31,341 | ||||||
| Valuation Allowance | (32,549 | ) | (31,341 | ) | ||||
| Net deferred tax asset | - | - | ||||||
Valuation allowances at December 31, 2025 and 2024 have been established to reduce future tax benefits not expected to be realized. Net Operating Loss (NOL) carryforwards created in tax years beginning after December 31, 2017 are limited by the TCJA but do not expire. At December 31, 2025, the Company had approximately $67.5 million in federal NOL carryforwards and approximately $81.4 million in state NOL carryforwards expiring from 2030 through 2034. The Company also had approximately $14.5 million in federal and state NOL carryforwards at December 31, 2025 that do not expire.
The Company is subject to U.S. federal income tax as well as income tax in Hawaii. The Company is currently open to examination by taxing authorities for tax years ended after . The Company recognizes and reports interest and penalties related to unrecognized tax benefits if applicable, within the provision for income tax expense. The Company had no unrecognized tax benefits for the years ended December 31, 2025 and 2024, and therefore did recognize any interest expense or penalties on unrecognized tax benefits. The Company paid no income taxes in the years ended December 31, 2025 and 2024.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Apr 1, 2026 | Showing above |
| 2024 | Mar 31, 2025 | |
| 2023 | Mar 28, 2024 | |
| 2022 | Mar 24, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 2, 2021 | |
| 2019 | Mar 3, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Feb 26, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Feb 26, 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.