OLD DOMINION FREIGHT LINE, INC. Income Taxes Disclosure
Note 4. Income Taxes
The components of the provision for income taxes are as follows:
|
|
Year Ended December 31, |
|
|||||||||
(In thousands) |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Current: |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
$ |
280,072 |
|
|
$ |
284,679 |
|
|
$ |
288,030 |
|
State |
|
|
68,780 |
|
|
|
67,505 |
|
|
|
66,903 |
|
|
|
|
348,852 |
|
|
|
352,184 |
|
|
|
354,933 |
|
Deferred: |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
|
(11,333 |
) |
|
|
18,585 |
|
|
|
42,728 |
|
State |
|
|
86 |
|
|
|
755 |
|
|
|
10,613 |
|
|
|
|
(11,247 |
) |
|
|
19,340 |
|
|
|
53,341 |
|
Total: |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
|
268,739 |
|
|
|
303,264 |
|
|
|
330,758 |
|
State |
|
|
68,866 |
|
|
|
68,260 |
|
|
|
77,516 |
|
Total provision for income taxes |
|
$ |
337,605 |
|
|
$ |
371,524 |
|
|
$ |
408,274 |
|
The following is a reconciliation of income tax expense and the effective tax rate calculated using the U.S. statutory federal income tax rate to our provision for income taxes for 2025, 2024, and 2023:
|
|
Year Ended December 31, |
|
||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
||||||||||||
(Amounts in thousands) |
|
Amount |
|
Rate |
|
|
Amount |
|
Rate |
|
|
Amount |
|
Rate |
|
||||||
Income tax expense at U.S. statutory rate |
|
$ |
285,875 |
|
|
21.0 |
% |
|
$ |
327,095 |
|
|
21.0 |
% |
|
$ |
346,033 |
|
|
21.0 |
% |
Federal tax credits |
|
|
(8,557 |
) |
|
(0.6 |
)% |
|
|
(8,600 |
) |
|
(0.6 |
)% |
|
|
— |
|
|
— |
% |
Federal other, net |
|
|
5,476 |
|
|
0.4 |
% |
|
|
(1,014 |
) |
|
0.0 |
% |
|
|
3,074 |
|
|
0.2 |
% |
State income taxes, net of federal benefit |
|
|
54,811 |
|
|
4.0 |
% |
|
|
54,043 |
|
|
3.5 |
% |
|
|
59,167 |
|
|
3.6 |
% |
Total provision for income taxes |
|
$ |
337,605 |
|
|
24.8 |
% |
|
$ |
371,524 |
|
|
23.9 |
% |
|
$ |
408,274 |
|
|
24.8 |
% |
The majority of the State income taxes, net of federal benefit for 2025 is comprised of California, Georgia, Illinois, Indiana, Kansas, Minnesota, Pennsylvania, Virginia and Wisconsin. The majority of the State income taxes, net of federal benefit for 2024 is comprised of California, Georgia, Iowa, Illinois, Indiana, Kansas, Pennsylvania, Tennessee, and Virginia. The majority of the State income taxes, net of federal benefit for 2023 is comprised of California, Georgia, Iowa, Illinois, Indiana, Kansas, Minnesota, Pennsylvania, and Virginia.
Deferred tax assets and liabilities are included in “Deferred income taxes” on our Balance Sheets and consist of the following:
|
|
December 31, |
|
|||||
(In thousands) |
|
2025 |
|
|
2024 |
|
||
Deferred tax assets: |
|
|
|
|
|
|
||
Claims and insurance reserves |
|
$ |
34,245 |
|
|
$ |
32,866 |
|
Accrued vacation |
|
|
26,334 |
|
|
|
23,379 |
|
Deferred compensation |
|
|
44,668 |
|
|
|
41,387 |
|
Other |
|
|
12,486 |
|
|
|
11,341 |
|
Total deferred tax assets |
|
|
117,733 |
|
|
|
108,973 |
|
|
|
|
|
|
|
|
||
Deferred tax liabilities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
(483,012 |
) |
|
|
(485,808 |
) |
Other |
|
|
(5,404 |
) |
|
|
(5,095 |
) |
Total deferred tax liabilities |
|
|
(488,416 |
) |
|
|
(490,903 |
) |
Net deferred tax liability |
|
$ |
(370,683 |
) |
|
$ |
(381,930 |
) |
We are subject to U.S. federal income tax, as well as income tax of multiple state tax jurisdictions. We remain open to examination by the Internal Revenue Service for tax years 2022 through 2025. We also remain open to examination by various state tax jurisdictions for tax years 2021 through 2025.
The Company’s liability for unrecognized tax benefits was immaterial as of December 31, 2025 and 2024. Interest and penalties related to uncertain tax positions, which were immaterial in 2025, 2024 and 2023, are recorded in “Provision for income taxes” on our Statements of Operations. Changes in our liability for unrecognized tax benefits could affect our effective tax rate, if recognized, but we do not expect any material changes within the next twelve months.
The components of income taxes paid are as follows:
|
|
Year Ended December 31, |
|
|||||||||
(In thousands) |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Federal (1) |
|
$ |
268,555 |
|
|
$ |
274,424 |
|
|
$ |
292,040 |
|
State |
|
$ |
63,167 |
|
|
|
63,191 |
|
|
|
69,408 |
|
Total income taxes paid |
|
$ |
331,722 |
|
|
$ |
337,615 |
|
|
$ |
361,448 |
|
(1) Includes payments of $189.1 million and $177.5 million in 2025 and 2024, respectively for purchased federal tax credits to offset estimated tax payments. In 2023, we had no purchased federal tax credits.
On July 4, 2025, the One Big Beautiful Bill Act (the “Act”), which includes a broad range of tax reform provisions affecting businesses, was signed into law in the U.S. The provisions of the Act applicable to our Company did not have a material impact on our financial statements for the quarter or year ended December 31, 2025. We do not expect the Act to have a material impact on our effective tax rate in the future. However, we do anticipate future cash tax benefits due to changes in the laws for depreciation.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
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.