Origin Materials, Inc.ORGN
Origin Materials, Inc. Income Taxes Disclosure
Income Taxes
Income before income tax (provision) benefit consisted of the following for the years ended:
| (in thousands) | December 31, 2024 | December 31, 2023 | |||||||||
| United States | $ | (84,452) | $ | 22,481 | |||||||
| Foreign | 1,424 | 230 | |||||||||
| (Loss) income before income tax (provision) benefit | $ | (83,028) | $ | 22,711 | |||||||
The federal, state, and foreign income and deferred tax (provision) benefit are summarized as follows for the years ended:
| (in thousands) | December 31, 2024 | December 31, 2023 | |||||||||
| Current | |||||||||||
| Federal | $ | — | $ | — | |||||||
| State | (29) | (20) | |||||||||
| Foreign | — | (139) | |||||||||
| Total current tax (provision) benefit | (29) | (159) | |||||||||
| Deferred | |||||||||||
| Federal | — | — | |||||||||
| State | — | — | |||||||||
| Foreign | (640) | 1,246 | |||||||||
| Total deferred tax (provision) benefit | (640) | 1,246 | |||||||||
| Total income tax (provision) benefit | $ | (669) | $ | 1,087 | |||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and operating losses and tax credit carryforwards.
The tax effects of significant items comprising the Company’s deferred taxes are as follows as of:
| (in thousands) | December 31, 2024 | December 31, 2023 | |||||||||
| Deferred tax assets | |||||||||||
| Net operating loss carryforwards | $ | 45,734 | $ | 34,076 | |||||||
| Available for sale marketable securities | 288 | 825 | |||||||||
| Lease liabilities | 945 | 1,050 | |||||||||
| Other | 263 | 51 | |||||||||
| Fixed assets and intangibles | — | 445 | |||||||||
| Capitalized research and development costs | 7,715 | 4,456 | |||||||||
| Stock Compensation | 1,636 | 2,806 | |||||||||
| Total deferred tax assets | 56,581 | 43,709 | |||||||||
| Valuation allowance | (53,775) | (41,420) | |||||||||
| Deferred tax liabilities | |||||||||||
| ROU asset | (835) | (1,012) | |||||||||
| Other | — | (16) | |||||||||
| Fixed assets and intangibles | (1,350) | — | |||||||||
| Total deferred tax liabilities | (2,185) | (1,028) | |||||||||
| Net deferred tax assets | $ | 621 | $ | 1,261 | |||||||
ASC 740 requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is more likely than not. Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carryforward period. Regarding the Origin US entities, the Company is in a significant cumulative loss position and has provided a valuation allowance against the US net deferred tax assets. Origin Canada is recognizing income and is projecting future taxable income sufficient to offset all its deferred tax assets. Therefore, some of the deferred tax assets in Canada are being recognized in 2023.
The valuation allowance increased by $12.4 million and $9.1 million for the years ended December 31, 2024 and 2023, respectively.
At December 31, 2024, we had federal net operating loss carryforwards of approximately $159.8 million to offset future federal taxable income, with $44.9 million available through 2037. We have state net operating loss carryforward of $100.6 million, available through 2044.
The Company plans to evaluate its R&D credits in the future and amend prior year federal an California tax returns to claim credits, which will carryforward to offset future income tax liability.
The effective tax rate of the Company’s income tax (provision) benefit differs from the federal statutory rate as follows for the years ended:
| December 31, 2024 | December 31, 2023 | ||||||||||||||||||||||
(in thousands, except percentages) | Amount | Percent | Amount | Percent | |||||||||||||||||||
| Statutory rate | $ | 17,436 | (21.0) | % | $ | (4,769) | (21.0) | % | |||||||||||||||
| State tax | (1,764) | 2.1 | % | 2,761 | 12.2 | % | |||||||||||||||||
| Foreign tax | — | — | % | (139) | (0.6) | % | |||||||||||||||||
| Valuation allowance | (12,843) | 15.5 | % | (10,629) | (46.8) | % | |||||||||||||||||
| Other | (321) | 0.4 | % | (98) | (0.5) | % | |||||||||||||||||
| Warrants and other equity items | (825) | 1.0 | % | 14,808 | 65.3 | % | |||||||||||||||||
| Foreign rate differential | (78) | 0.1 | % | (128) | (0.6) | % | |||||||||||||||||
| Stock-based compensation | (2,274) | 2.7 | % | (719) | (3.2) | % | |||||||||||||||||
| Total | $ | (669) | 0.8 | % | $ | 1,087 | 4.8 | % | |||||||||||||||
Under certain provisions of the Internal Revenue Code of 1986, as amended, a portion of the federal and state net operating loss carryforwards may be subject to an annual utilization limitation as a result of a change in ownership of the Company. Federal and California tax laws impose significant restrictions on the utilization of net operating loss carryforwards in the event of a change in ownership of the Company, as defined by Internal Revenue Code Section 382 (“Section 382”). The Company has experienced ownership changes as defined by IRC Section 382 and the impact of those changes has been reflected in the consolidated financial statements. In addition, in the future the Company may experience ownership changes, which may limit the utilization of net operating loss carryforwards or other tax attributes.
There were no unrecognized tax benefits in the years ended December 31, 2024 and 2023. The Company files income tax returns in the United States, various US states, and Canada. All tax years remain open in all jurisdictions. The Company is not currently under examination by income tax authorities in federal, state or other foreign jurisdictions. The Company does not anticipate any significant changes within 12 months of this reporting date of its uncertain tax positions.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Mar 13, 2025 | Showing above |
| 2023 | Mar 5, 2024 | |
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.