MYERS INDUSTRIES INC Income Taxes Disclosure
11. Income Taxes
The Company's effective tax rate was 22.6%, 46.8% and 26.0% in 2025, 2024 and 2023, respectively. A reconciliation of the federal statutory income tax rate to the Company’s effective tax rate is as follows:
|
|
Percent of Income before |
|
||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
||||||||||||
U.S. federal statutory tax rate |
|
$ |
9,478 |
|
|
21.0 |
% |
|
$ |
2,844 |
|
|
21.0 |
% |
|
$ |
13,872 |
|
|
21.0 |
% |
State and local income taxes, net of federal income tax effect (1) |
|
|
952 |
|
|
2.1 |
|
|
|
877 |
|
|
6.5 |
|
|
|
1,816 |
|
|
2.8 |
|
Foreign tax effects |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Canada |
|
|
554 |
|
|
1.2 |
|
|
|
365 |
|
|
2.7 |
|
|
|
995 |
|
|
1.5 |
|
Other foreign jurisdictions |
|
|
234 |
|
|
0.5 |
|
|
|
88 |
|
|
0.7 |
|
|
|
26 |
|
|
0.0 |
|
Effects of cross border tax laws |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign derived intangible income (FDII) |
|
|
(1,706 |
) |
|
(3.8 |
) |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
Nontaxable or nondeductible items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Merger and acquisition transaction costs |
|
|
— |
|
|
— |
|
|
|
993 |
|
|
7.3 |
|
|
|
— |
|
|
— |
|
Nondeductible compensation |
|
|
524 |
|
|
1.2 |
|
|
|
637 |
|
|
4.7 |
|
|
|
197 |
|
|
0.3 |
|
Goodwill impairment |
|
|
— |
|
|
— |
|
|
|
413 |
|
|
3.0 |
|
|
|
— |
|
|
— |
|
Other |
|
|
437 |
|
|
1.0 |
|
|
|
141 |
|
|
1.0 |
|
|
|
75 |
|
|
0.1 |
|
Changes in unrecognized tax benefits |
|
|
(85 |
) |
|
(0.2 |
) |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
Other adjustments |
|
|
(181 |
) |
|
(0.4 |
) |
|
|
(16 |
) |
|
(0.1 |
) |
|
|
208 |
|
|
0.3 |
|
Effective tax rate for the year |
|
$ |
10,207 |
|
|
22.6 |
% |
|
$ |
6,342 |
|
|
46.8 |
% |
|
$ |
17,189 |
|
|
26.0 |
% |
(1) State taxes, net of federal benefit due to activity in Oklahoma and Pennsylvania for 2025, Florida, Illinois, Oklahoma and Pennsylvania for 2024 and Illinois, Indiana, Iowa and Oklahoma for 2023, which make up the majority (greater than 50%) of the tax effect in this category.
Income before income taxes was attributable to the following sources:
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
United States |
|
$ |
31,775 |
|
|
$ |
3,409 |
|
|
$ |
55,553 |
|
Foreign |
|
|
13,360 |
|
|
|
10,134 |
|
|
|
10,503 |
|
Totals |
|
$ |
45,135 |
|
|
$ |
13,543 |
|
|
$ |
66,056 |
|
Income tax expense consisted of the following:
|
|
Year ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Current: |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
$ |
2,362 |
|
|
$ |
7,877 |
|
|
$ |
11,296 |
|
State and local |
|
|
1,475 |
|
|
|
2,013 |
|
|
|
2,237 |
|
Foreign |
|
|
3,164 |
|
|
|
2,500 |
|
|
|
2,617 |
|
Total current provision |
|
|
7,001 |
|
|
|
12,390 |
|
|
|
16,150 |
|
Deferred: |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
|
2,693 |
|
|
|
(5,195 |
) |
|
|
617 |
|
State and local |
|
|
(270 |
) |
|
|
(903 |
) |
|
|
62 |
|
Foreign |
|
|
783 |
|
|
|
50 |
|
|
|
360 |
|
Total deferred provision |
|
|
3,206 |
|
|
|
(6,048 |
) |
|
|
1,039 |
|
Provision for income taxes |
|
$ |
10,207 |
|
|
$ |
6,342 |
|
|
$ |
17,189 |
|
Income taxes paid, net of any refunds received was as follows:
|
|
Year ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Federal |
|
$ |
9,800 |
|
|
$ |
8,000 |
|
|
$ |
7,900 |
|
State and local |
|
|
2,300 |
|
|
|
2,685 |
|
|
|
2,580 |
|
Foreign |
|
|
3,024 |
|
|
|
2,351 |
|
|
|
2,971 |
|
|
|
$ |
15,124 |
|
|
$ |
13,036 |
|
|
$ |
13,451 |
|
The following table summarizes income taxes paid, net of any refunds received, disaggregated by individual jurisdictions in which income taxes paid, net of refunds received is equal to or greater than five percent of total income taxes paid:
|
|
Year ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Foreign |
|
|
|
|
|
|
|
|
|
|||
Canada |
|
$ |
2,228 |
|
|
$ |
2,175 |
|
|
$ |
2,779 |
|
Other Foreign |
|
|
796 |
|
|
|
176 |
|
|
|
192 |
|
|
|
$ |
3,024 |
|
|
$ |
2,351 |
|
|
$ |
2,971 |
|
During 2018, the Company recorded a provision and related deferred tax liability of $0.6 million related primarily to the earnings of the Company’s subsidiary in Guatemala, which were deemed by management to no longer be permanently reinvested. During 2025, the Company increased the deferred tax liability to $0.8 million. The earnings and profits for all foreign subsidiaries had been previously included in the calculation of the one-time deemed repatriation transition tax, and thus, should there be a repatriation of earnings from any other foreign subsidiaries in future periods, the Company expects to be subject to only foreign withholding tax. Management does not currently anticipate a repatriation of earnings from any other foreign subsidiaries, except as provided above, as these earnings are deemed to be permanently reinvested.
Significant components of the Company’s deferred taxes as of December 31, 2025 and 2024 are as follows:
|
|
2025 |
|
|
2024 |
|
||
Deferred income tax assets |
|
|
|
|
|
|
||
Compensation accruals |
|
$ |
1,647 |
|
|
$ |
2,372 |
|
Inventory valuation |
|
|
2,958 |
|
|
|
3,094 |
|
Allowance for uncollectible accounts |
|
|
852 |
|
|
|
931 |
|
Non-deductible accruals |
|
|
4,765 |
|
|
|
3,983 |
|
Operating lease liability |
|
|
5,290 |
|
|
|
6,438 |
|
Finance lease liability |
|
|
1,679 |
|
|
|
1,809 |
|
Goodwill |
|
|
3,426 |
|
|
|
3,766 |
|
Other deductible non-goodwill intangibles |
|
|
4,775 |
|
|
|
5,420 |
|
Interest limitation carryforward |
|
|
— |
|
|
|
2,759 |
|
Capital loss carryforwards |
|
|
127 |
|
|
|
127 |
|
Net operating loss carryforwards |
|
|
36 |
|
|
|
54 |
|
|
|
|
25,555 |
|
|
|
30,753 |
|
Valuation allowance |
|
|
(127 |
) |
|
|
(127 |
) |
|
|
|
25,428 |
|
|
|
30,626 |
|
Deferred income tax liabilities |
|
|
|
|
|
|
||
Property, plant and equipment |
|
|
15,590 |
|
|
|
15,492 |
|
Goodwill and indefinite-lived intangibles |
|
|
10,303 |
|
|
|
14,410 |
|
Non-deductible intangibles |
|
|
24,284 |
|
|
|
22,056 |
|
Right of use asset - operating leases |
|
|
5,212 |
|
|
|
6,418 |
|
Finance lease assets |
|
|
1,509 |
|
|
|
1,665 |
|
State deferred taxes |
|
|
3,042 |
|
|
|
3,256 |
|
Other |
|
|
1,782 |
|
|
|
1,008 |
|
|
|
|
61,722 |
|
|
|
64,305 |
|
Net deferred income tax liability |
|
$ |
(36,294 |
) |
|
$ |
(33,679 |
) |
In 2022, the Company impaired its investment in a joint venture incurring a capital loss for which a deferred tax asset of $0.1 million was recorded. As of December 31, 2022 a valuation allowance of $0.1 million was recorded against this capital loss deferred tax asset, as the recovery is not more likely than not.
In 2024, the Company realized a $1.7 million benefit from a net operating loss ("NOL") carryforward acquired in the Signature acquisition described in Note 3. There is no benefit to future years after full utilization of the NOL carryforward in 2024.
The following table summarizes the activity related to the Company’s unrecognized tax benefits:
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Balance at January 1 |
|
$ |
1,339 |
|
|
$ |
— |
|
|
$ |
— |
|
Increases related to previous year tax positions |
|
|
79 |
|
|
|
1,339 |
|
|
|
— |
|
Reductions due to lapse of applicable statute of limitations |
|
|
(164 |
) |
|
|
— |
|
|
|
— |
|
Balance at December 31 |
|
$ |
1,254 |
|
|
$ |
1,339 |
|
|
$ |
— |
|
The total amount of gross unrecognized tax benefits that would reduce the Company’s effective tax rate was $1.3 million, $1.3 million and $0.0 million at December 31, 2025, 2024 and 2023, respectively.
The Company and its subsidiaries file U.S. Federal, state and local, and non-U.S. income tax returns. As of December 31, 2025, the Company is no longer subject to U.S. Federal examinations by tax authorities for tax years before 2022. The company is subject to state and local income tax examinations for tax years 2021 through 2024. In addition, the Company is subject to non-U.S. income tax examinations for tax years of .
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 5, 2026 | Showing above |
| 2024 | Mar 6, 2025 | |
| 2023 | Mar 5, 2024 | |
| 2022 | Mar 3, 2023 | |
| 2021 | Mar 10, 2022 | |
| 2020 | Mar 11, 2021 | |
| 2019 | Mar 6, 2020 | |
| 2018 | Mar 8, 2019 | |
| 2017 | Mar 9, 2018 | |
| 2016 | Mar 9, 2017 | |
| 2015 | Mar 14, 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.