NU SKIN ENTERPRISES, INC.NUS
NU SKIN ENTERPRISES, INC. Income Taxes Disclosure
| 12. |
Income Taxes
|
Consolidated (loss) income before provision for income taxes consists of the following for the years ended December 31, 2025, 2024 and 2023 (U.S. dollars in thousands):
|
2025
|
2024
|
2023
|
||||||||||
|
U.S.
|
$
|
114,222
|
$
|
(237,693
|
)
|
$
|
(37,152
|
)
|
||||
|
Foreign
|
81,975
|
62,642
|
63,730
|
|||||||||
|
Total
|
$
|
196,197
|
$
|
(175,051
|
)
|
$
|
26,578
|
|||||
The provision (benefit) for current and deferred taxes for the years ended December 31, 2025, 2024 and 2023 consists of the following (U.S. dollars in thousands):
|
2025
|
2024
|
2023
|
||||||||||
|
Current
|
||||||||||||
|
Federal
|
$
|
—
|
$
|
998
|
$
|
—
|
||||||
|
State
|
4,987
|
708
|
3,903
|
|||||||||
|
Foreign
|
30,986
|
25,314
|
29,179
|
|||||||||
|
35,973
|
27,020
|
33,082
|
||||||||||
|
Deferred
|
||||||||||||
|
Federal
|
3,837
|
(60,354
|
)
|
(18,039
|
)
|
|||||||
|
State
|
(1,127
|
)
|
(1,593
|
)
|
(1,440
|
)
|
||||||
|
Foreign
|
(2,690
|
)
|
6,470
|
4,380
|
||||||||
|
20
|
(55,477
|
)
|
(15,099
|
)
|
||||||||
|
Provision (benefit) for income taxes
|
$
|
35,993
|
$
|
(28,457
|
)
|
$
|
17,983
|
|||||
The principal components of deferred taxes are as follows (U.S. dollars in thousands):
|
Year Ended December 31,
|
||||||||
|
2025
|
2024
|
|||||||
|
Deferred tax assets:
|
||||||||
|
Inventory differences
|
$
|
131,774
|
$
|
108,895
|
||||
|
Foreign tax credit and other foreign benefits
|
9,802
|
36,689
|
||||||
|
Stock-based compensation
|
4,826
|
3,882
|
||||||
|
Accrued expenses not deductible until paid
|
25,883
|
26,529
|
||||||
|
Foreign currency exchange
|
285 | — | ||||||
|
Net operating losses
|
9,874
|
19,710
|
||||||
|
Interest Expense Limitation – 163(j)
|
— |
2,832 |
||||||
|
Capitalized research and development
|
27,342
|
27,917
|
||||||
|
R&D credit carryforward
|
3,205
|
2,594
|
||||||
|
Other
|
290
|
285
|
||||||
|
Gross deferred tax assets
|
213,281
|
229,333
|
||||||
|
Deferred tax liabilities:
|
||||||||
|
Foreign currency exchange
|
— | 1,341 | ||||||
|
Foreign withholding taxes
|
11,728
|
10,936
|
||||||
|
Intangibles step-up
|
1,397
|
1,020
|
||||||
|
Amortization of intangibles
|
5,846
|
11,215
|
||||||
|
Other
|
1,642
|
6,580
|
||||||
|
Gross deferred tax liabilities
|
20,613
|
31,092
|
||||||
|
Valuation allowance
|
(21,261
|
)
|
(24,337
|
)
|
||||
|
Deferred taxes, net
|
$
|
171,407
|
$
|
173,904
|
||||
At December 31, 2025, the Company had foreign operating loss carryforwards of $27.2 million for tax purposes, which will be available to offset future taxable income. If not used, $11.5 million of carryforwards will expire between and , while $15.7 million do not expire.
Tax effected, the foreign operating losses are $8.3 million. A valuation allowance has been placed on foreign operating loss carryforwards
of $8.2 million. In addition, a valuation allowance of $9.8 million has been recorded on a portion of the foreign tax credit carryforwards which will expire between
and , and all of the remaining federal and Utah R&D credit carryforwards of $3.2 million which will expire between and .
The Company uses the tax law ordering approach when determining when excess tax benefits have been realized.
Valuation allowances have been recognized for all remaining foreign
tax credits, all remaining federal and Utah R&D credits and the majority of the foreign net operating loss carryforwards. On January 2, 2025 the
Company sold its subsidiary Mavely, which affected its U.S. earnings. The gain from the sale in the U.S. increased the Company’s ability to utilize foreign and R&D tax credits. The remaining R&D credits as of December
31,2025 are not expected to be realized and a valuation allowance was placed against them. The other remaining valuation allowances were recognized for assets which it is more likely than not some portion or all of the deferred tax asset will
not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary difference, projected future taxable income, tax planning strategies
and recent financial operations. When the Company determines that there is sufficient positive evidence to utilize the remaining foreign tax credits or the foreign net operating losses, the valuation allowance will be released which would
reduce the provision for income taxes.
The deferred tax asset valuation adjustments for the years ended December 31, 2025, 2024 and 2023 are as follows (U.S. dollars in thousands):
|
Year Ended December 31,
|
||||||||||||
| |
2025
|
2024
|
2023
|
|||||||||
|
Balance at the beginning of period
|
$
|
24,337
|
$
|
47,142
|
$
|
33,557
|
||||||
|
Additions charged to cost and expenses
|
8,088
|
(1) |
2,245
|
(4) |
13,183
|
(6) |
||||||
|
Decreases
|
(5,134
|
)(2)
|
(27,086
|
)(5)
|
(1,825
|
)(7)
|
||||||
|
Adjustments
|
(6,030
|
)(3)
|
2,036
|
(3) |
2,227
|
(3) |
||||||
|
Balance at the end of the period
|
$
|
21,261
|
$
|
24,337
|
$
|
47,142
|
||||||
|
(1)
|
Increase in
valuation is due primarily to net operating losses in foreign markets, branch foreign tax credits, and Utah R&D credits.
|
|
(2)
|
The decrease was due to utilization and expiration of foreign net operating losses.
|
|
(3)
|
Represents the net currency effects of translating valuation allowances at
current rates of exchange.
|
|
(4)
|
Increase in valuation is due primarily to net operating losses in foreign markets
|
|
(5)
|
The decrease was due primarily to the release of the valuation allowance against $18.3 million of foreign tax credits and $2.3
million of R&D credits.
|
|
(6)
|
Increase in valuation is due primarily to net operating losses in foreign markets and $6.1 million that was recorded on the foreign tax credit carryforward.
|
|
(7)
|
The decrease was due to expiration of foreign net operating losses.
|
The components of deferred taxes, net on a jurisdiction basis are as follows (U.S. dollars in thousands):
|
Year Ended December 31,
|
||||||||
|
2025
|
2024
|
|||||||
|
Net noncurrent deferred tax assets
|
$
|
171,717
|
$
|
174,249
|
||||
|
Net noncurrent deferred tax liabilities
|
310
|
345
|
||||||
|
Deferred taxes, net
|
$
|
171,407
|
$
|
173,904
|
||||
The Company is subject to regular audits by federal, state and foreign tax authorities. These audits may result in proposed assessments that may result in additional tax
liabilities.
The actual tax rate for the years ended December 31, 2025, 2024 and 2023 compared to the statutory U.S. Federal tax rate is as follows:
|
Year Ended December 31,
|
||||||||
|
2024
|
2023
|
|||||||
|
Income taxes at statutory rate
|
21.00
|
%
|
21.00
|
%
|
||||
|
Excess tax benefit from equity award
|
(0.73
|
)%
|
5.04
|
%
|
||||
| Deferred compensation |
1.35 | % | (4.28 | )% | ||||
| Executive salary limitation |
(1.15 | )% | 1.59 | % | ||||
| State taxes | 0.38 | % | 7.34 | % | ||||
| Foreign exchange | 0.20 | % | (1.91 | )% | ||||
|
Non-U.S. income taxed at different rates
|
(2.55
|
)%
|
12.70
|
%
|
||||
|
Foreign withholding taxes
|
(0.89
|
)%
|
13.31
|
%
|
||||
|
Change in reserve for uncertain tax positions
|
(3.77
|
)%
|
1.74
|
%
|
||||
|
Valuation allowance recognized foreign tax credit & others
|
11.89
|
%
|
24.66
|
%
|
||||
|
Foreign-Derived Intangible Income (FDII)
|
—
|
(14.11
|
)%
|
|||||
| Acquisition adjustments |
(1.55 | )% | (0.05 | )% | ||||
| Goodwill impairment |
(7.86 | )% | — | |||||
|
Other
|
(0.06
|
)%
|
0.63
|
%
|
||||
|
16.26
|
%
|
67.66
|
%
|
|||||
|
Year Ended December 31,
|
||||||||
|
2025
|
||||||||
|
Amount
|
Percent
|
|||||||
|
Income taxes at U.S statutory rate
|
$
|
41,201
|
21.00
|
%
|
||||
|
State and Local Income Taxes, Net of Federal Income Tax Effect(1)
|
3,057
|
1.56
|
%
|
|||||
|
Foreign Tax Effects:
|
||||||||
|
China
|
||||||||
|
Withholding Tax
|
4,179
|
2.13
|
%
|
|||||
|
Other
|
1,010
|
0.51
|
%
|
|||||
|
Korea
|
||||||||
|
Withholding Tax
|
2,855
|
1.46
|
%
|
|||||
|
Other
|
152
|
0.08
|
%
|
|||||
|
Argentina
|
||||||||
|
Other
|
2,995
|
1.53
|
%
|
|||||
|
Other Foreign Jurisdictions
|
4,874
|
2.48
|
%
|
|||||
|
Effect of Cross-Border Tax Laws:
|
||||||||
|
Foreign-Derived Intangible Income
|
(6,649
|
)
|
(3.39
|
)%
|
||||
|
Tax Credits:
|
||||||||
|
R&D Credits
|
(12,134
|
)
|
(6.18
|
)%
|
||||
|
Foreign Tax Credits
|
(8,058
|
)
|
(4.11
|
)%
|
||||
|
Changes in Valuation Allowances
|
6,376
|
3.25
|
%
|
|||||
|
Non-Taxable or Nondeductible Items:
|
||||||||
|
Employee Stock Options
|
2,076
|
1.06
|
%
|
|||||
|
Other
|
(1,249
|
)
|
(0.64
|
)%
|
||||
|
Changes in Unrecognized Tax Benefits
|
(4,692
|
)
|
(2.39
|
)%
|
||||
|
Effective Tax Rate
|
35,993
|
18.35
|
%
|
|||||
| (1) |
State and Local taxes in California and New Jersey made up
the majority (greater than 50 percent) of the tax effect in this category.
|
The 2025 rate reconciliation is disaggregated in accordance with ASU 2023-09, which was adopted prospectively in 2025. The increase in the effective tax rate for 2025 is primarily due to the $8.1 million of additional research and development credits determined creditable during the year, the sale of Mavely, the impairment of the
BeautyBio asset group and the impairment of an equity investment. The decrease in the effective tax rate for 2024 is primarily due to the company having an overall book loss but still paying taxes primarily in foreign jurisdictions.
The actual taxes paid for the year ended December 31, 2025 was as follows:
|
2025
|
||||
|
U.S. Federal
|
$
|
4,000
|
||
|
State
|
5,312
|
|||
|
Foreign:
|
||||
|
Argentina
|
3,010
|
|||
|
China
|
9,544
|
|||
|
Indonesia
|
4,984
|
|||
|
Japan
|
3,100
|
|||
|
Korea
|
3,390
|
|||
|
Other
|
7,477
|
|||
|
Total Taxes Paid
|
$
|
40,817
|
||
Cash paid for income taxes totaled $30.4 million and $32.4 million for the years ended December 31, 2024 and 2023, respectively.
The cash paid for income taxes is disaggregated in accordance with ASU 2023-09. The cumulative amount of undistributed earnings of the Company’s non-U.S. Subsidiaries
held for indefinite reinvestment is approximately $60.0 million, at December 31, 2025. If this amount were repatriated to the United
States, the amount of incremental taxes would be approximately $6.0 million.
On July 4, 2025, U.S. legislation formally titled “An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14” (“the Act”) and
commonly referred to as the One Big Beautiful Bill Act was signed into law. The Act, among other things, extended key provisions of the 2017 Tax Cuts and Jobs Act and introduced targeted changes to the U.S. federal income tax regime. The Act has
not materially impacted the Company’s effective tax rate.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 13, 2026 | Showing above |
| 2024 | Feb 14, 2025 | |
| 2023 | Feb 15, 2024 | |
| 2022 | Feb 16, 2023 | |
| 2021 | Feb 16, 2022 | |
| 2020 | Feb 11, 2021 | |
| 2019 | Feb 13, 2020 | |
| 2018 | Feb 14, 2019 | |
| 2017 | Feb 16, 2018 | |
| 2016 | Feb 27, 2017 | |
| 2015 | Feb 18, 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.