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, 2024 and 2023 were as follows:

 

 

		Year Ended December 31,
		2024				2023
		(in thousands)
Federal income tax expense/(benefit) at statutory rate			(1,595	)			(647	)
Adjusted for:
Permanent Differences			6				99
True-Ups			(372	)			-
Valuation Allowance			1,961				548
Income Tax expense/(benefit)			-				-

 

Deferred tax assets were comprised of the following temporary differences as of December 31, 2024 and 2023:

 

		Year Ended December 31,
		2024				2023
Net operating loss and tax credit carryforwards		$	24,770			$	24,648
Joint Venture and other investments			(279	)			(446	)
Accrued retirement benefits and other compensation			2,728				1,233
Property net book value			3,042				3,002
Deferred Revenue			1,051				962
Reserves and other			29				37
Total Deferred Tax Assets			31,341				29,436
Valuation Allowance			(31,341	)			(29,436	)
Net deferred tax asset			-				-

 

Valuation allowances at December 31, 2024 and 2023 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, 2024, the Company had approximately $76.5 million in federal NOL carryforwards and approximately $81.4 million in state NOL carryforwards expiring from 2030 through 2034. The Company also had approximately $8.9 million in federal and state NOL carryforwards at December 31, 2024 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 2020. 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, 2024 and 2023, and therefore did not recognize any interest expense or penalties on unrecognized tax benefits.