ORASURE TECHNOLOGIES INCOSUR
ORASURE TECHNOLOGIES INC Income Taxes Disclosure
INCOME TAXES:
Income (loss) before income tax expense consists of the following:
| For the Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| United States | $ | (62,742) | $ | (21,523) | $ | 61,671 | |||||||||||
| Foreign | (1,844) | 5,522 | (5,413) | ||||||||||||||
| $ | (64,586) | $ | (16,001) | $ | 56,258 | ||||||||||||
In July of 2025, the One Big Beautiful Bill Act of 2025 (the “OBBBA”) was enacted in the U.S. The OBBBA includes several significant tax provisions, including the reinstatement of full expensing of domestic research and development costs among other domestic and international changes. The OBBBA is not expected to have a significant impact on the Company’s tax expense or cash paid for taxes. Our results for the year ended December 31, 2025 include the impact of the OBBBA on our consolidated financial statements.
The components of income tax expense (benefit) are as follows:
| For the Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current | |||||||||||||||||
| Federal | $ | — | $ | 229 | $ | — | |||||||||||
| State | 124 | 111 | 1,896 | ||||||||||||||
| Foreign | (176) | 2,116 | 605 | ||||||||||||||
| (52) | 2,456 | 2,501 | |||||||||||||||
| Deferred | |||||||||||||||||
| Federal | (11,186) | (2,962) | 13,570 | ||||||||||||||
| State | 870 | 1,368 | (382) | ||||||||||||||
| Foreign | 10,355 | 4,365 | (1,867) | ||||||||||||||
| 39 | 2,771 | 11,321 | |||||||||||||||
| Increase (decrease) in valuation allowance | 1,814 | (3,428) | (11,219) | ||||||||||||||
| 1,853 | (657) | 102 | |||||||||||||||
| Total income tax expense | $ | 1,801 | $ | 1,799 | $ | 2,603 | |||||||||||
For the year ended December 31, 2025, the Company recorded net foreign tax benefit of $0.3 million. For the years ended December 31, 2024, and 2023 the Company recorded net foreign income tax expense of $1.4 million, and $0.7 million, respectively. For the years ended December 31, 2025, 2024, and 2023 the Company recorded U.S. federal tax expense of
$0.2 million, $0.2 million, and $0.0 million, respectively and state tax expense of $1.9 million, $0.1 million, and $1.9 million respectively.
Total cash paid for income taxes was as follows:
| For the Year Ended December 31, 2025 | |||||
| Federal | $ | — | |||
| State: | |||||
| Utah | (100) | ||||
| Other | 74 | ||||
| (26) | |||||
| Foreign: | |||||
| Canada | 2,539 | ||||
| United Kingdom | (672) | ||||
| 1,867 | |||||
Total cash paid for income taxes (net of refunds) (1) | $ | 1,841 | |||
(1) Total cash paid for income taxes during the year ended December 31, 2024 was $1.8 million. The Company received income tax refunds of $4.9 million for year ended December 31, 2023 (prior to adoption of ASU 2023-09). | |||||
The reconciliation of the statutory United States federal income tax rate to the Company's effective tax rate is as follows:
| For the Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Statutory U.S. federal income tax rate | 21.0 | % | 21.0 | % | 21.0 | % | |||||||||||
| Nondeductible executive compensation | (1.1) | (8.5) | 0.5 | ||||||||||||||
| Impact of stock-based payment awards | (1.8) | (2.3) | (0.3) | ||||||||||||||
| Tax effect of foreign items | (0.6) | (1.9) | (0.4) | ||||||||||||||
| State income taxes, net of federal benefit | 1.3 | (9.1) | 2.0 | ||||||||||||||
| U.S. and foreign tax credits | 1.3 | 1.2 | 1.3 | ||||||||||||||
| Uncertain tax positions | (2.9) | — | — | ||||||||||||||
| Nondeductible expenses and other | 1.2 | (2.4) | 0.9 | ||||||||||||||
| Nondeductible transaction costs | (0.2) | (2.1) | — | ||||||||||||||
| NOL adjustment, domestic | (2.2) | — | — | ||||||||||||||
| NOL adjustment, foreign | 25.5 | (31.4) | — | ||||||||||||||
| Change in the estimated fair value of acquisition-related contingent consideration | (1.4) | — | — | ||||||||||||||
| Acquisition adjustments | (8.7) | — | — | ||||||||||||||
| Non-controlling interests | (0.7) | 2.2 | — | ||||||||||||||
| Change in valuation allowance, federal and state | (14.4) | (10.0) | — | ||||||||||||||
| Change in valuation allowance, foreign | (19.0) | 32.1 | (20.4) | ||||||||||||||
| Effective tax rate | (2.7) | % | (11.2) | % | 4.6 | % | |||||||||||
The reconciliation of the statutory United States federal income tax rate to the Company's effective tax rate is as follows:
| For the Year Ended December 31, 2025 | |||||||||||
| Dollars | Percentage | ||||||||||
| Statutory U.S. federal income tax rate | $ | (14,055) | 21.0 | % | |||||||
State and local income taxes, net of federal income tax effect (1) | 325 | (0.5) | % | ||||||||
| Foreign tax effects | |||||||||||
| United Kingdom | |||||||||||
| Change in NOL limitation | (17,062) | 25.5 | % | ||||||||
| Intangible acquisition adjustment | 4,524 | (6.7) | % | ||||||||
| Change in valuation allowances | 12,728 | (19.0) | % | ||||||||
| Other | (195) | 0.3 | % | ||||||||
| Other foreign jurisdictions | 114 | (0.2) | % | ||||||||
| Effect of changes in tax laws/rates enacted in the current period | — | — | % | ||||||||
| Effect of cross-border tax laws | |||||||||||
| Global intangible low-taxed income | 523 | (0.8) | % | ||||||||
| Tax credits | |||||||||||
| Research and development tax credits | (536) | 0.8 | % | ||||||||
| Changes in valuation allowances | 8,700 | (13.0) | % | ||||||||
| Nontaxable or nondeductible items | |||||||||||
| Share based payment awards | 773 | (1.1) | % | ||||||||
| Nondeductible officer's compensation | 714 | (1.1) | % | ||||||||
| Change in the estimated fair value of acquisition-related contingent consideration | 960 | (1.4) | % | ||||||||
| Other | 192 | (0.3) | % | ||||||||
| Changes in unrecognized tax benefits | 1,728 | (2.6) | % | ||||||||
| Acquisition adjustments | 1,285 | (1.9) | % | ||||||||
| NOL adjustment | 1,441 | (2.2) | % | ||||||||
| Other adjustments | (358) | 0.5 | % | ||||||||
| Effective tax rate | $ | 1,801 | (2.7) | % | |||||||
(1) The tax effect in this category was primarily driven by state taxes in Pennsylvania (greater than 50%). | |||||||||||
Deferred income taxes reflect the tax effects of temporary differences between the basis of assets and liabilities recognized for financial reporting purposes and tax purposes, and net operating loss and tax credit carryforwards. Significant components of the Company's deferred tax assets (liabilities) are as follows:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Net operating loss carryforwards | $ | 54,859 | $ | 55,583 | |||||||
| Inventories | 2,108 | 2,344 | |||||||||
| Capitalized research and development costs | 10,889 | 12,946 | |||||||||
| Accruals and reserves currently not deductible | 1,805 | 2,754 | |||||||||
| Depreciation and amortization | 114 | — | |||||||||
| Lease liabilities | 2,254 | 2,497 | |||||||||
| Stock-based compensation | 3,244 | 3,303 | |||||||||
| Tax credit carryforwards | 6,628 | 4,184 | |||||||||
| Net deferred tax asset | 81,901 | 83,611 | |||||||||
| Valuation allowance | (77,006) | (75,191) | |||||||||
| Total deferred tax assets | $ | 4,895 | $ | 8,420 | |||||||
| Deferred tax liabilities: | |||||||||||
| Depreciation and amortization | — | (2,017) | |||||||||
| Acquired intangible assets | (2,220) | (3,981) | |||||||||
| Right-of-use assets | (2,073) | (2,266) | |||||||||
| Deferred compensation | (331) | — | |||||||||
| Total deferred tax liabilities | $ | (4,624) | $ | (8,264) | |||||||
| Net deferred tax asset | $ | 271 | $ | 156 | |||||||
In assessing the realizability of the Company's deferred tax asset, the Company considers all relevant positive and negative evidence in determining whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The realization of the gross deferred tax assets is dependent upon several factors, including the generation of sufficient taxable income, to realize the NOL carryforwards. In 2008, the Company established a full valuation allowance against the Company's U.S. deferred tax asset. The Company has not achieved a level of sustained profitability that would, in the Company's judgment, support the release of the valuation allowance. Management believes the full valuation allowance is still appropriate as of December 31, 2025 and 2024. As a result, no U.S. federal income tax benefit was recorded for the years ended December 31, 2025, 2024, and 2023.
The Company's federal NOL carryforwards consist of $232.9 million from existing business along with $12.9 million of acquired NOL carryforwards. None of these NOL carryforwards have an expiration date. The Company does not have any foreign NOL carryforwards as of December 31, 2025. As of December 31, 2024, the Company's foreign NOL carryforwards consisted of $63.0 million of acquired NOL carryforwards. The foreign NOLs were reduced to zero due to loss limitation rules. The Company's state NOL carryforwards consist of $57.6 million from existing business along with $7.2 million of acquired NOL carryforwards. The state NOL carryforwards have expirations as follows:
| Year of Expiration | NOLs | |||||||
| 2026 - 2041 | $ | 30,419 | ||||||
| 2042 - 2055 | 20,023 | |||||||
| Non-Expiring | 14,350 | |||||||
| $ | 64,792 | |||||||
The Tax Reform Act of 1986 contains provisions under Internal Revenue Code (“IRC”) Section 382 and Section 383 that limit the annual amount of federal and state NOL carryforwards and tax credits that can be used in any given year in the
event a significant change in ownership. The Company does not believe that there is a Section 382 limitation that will impair the Company's future ability to utilize NOLs to offset the Company's future taxable income. The Company continues to review ownership changes on an annual basis and the Company does not believe it has had a subsequent ownership change that would impact the NOLs. The Company acquired 382 limited NOL carryforwards as part of its acquisition of BioMedomics. These NOL carryforwards have no expiration date. The Company has not undertaken any formal 382 or 383 studies that would indicate any limitations to its NOL or credit carryforwards. However, any such study could potentially limit the NOL and credit carryforwards of the Company.
It is still the Company's intention to continue to permanently reinvest the historical undistributed earnings of the Company's foreign subsidiary to the extent that the Company will not incur any additional tax expense associated with foreign withholding or other local tax expense on the future cash transfers. As such, deferred taxes have not been recorded on the unremitted earnings of the foreign subsidiary as of December 31, 2025.
As of December 31, 2025, the Company's gross unrecognized tax benefits totaled $2.1 million, and based upon the valuation allowance for the Company's U.S. operations, the recognition of any tax benefit would not impact the Company's effective tax rate. The 2025 addition of $1.7 million is not offset by the valuation allowance and its reversal would impact the Company’s effective tax rate. The Company records interest and penalties related to unrecognized tax benefits as a component of income tax expense. Interest and penalties were $0.2 million in 2025, and immaterial in 2024 and 2023. As a result of the Company's NOL carryforward position, the Company has been subject to audit by the Internal Revenue Service since the Company's inception, as well as by several jurisdictions for the years ended September 30, 1998 through December 31, 2025.
The reconciliation of the Company's unrecognized tax benefits is as follows:
| 2025 | 2024 | 2023 | |||||||||||||||
| Balance at January 1 | $ | 333 | $ | 304 | $ | 373 | |||||||||||
| Additions for tax positions of prior periods | 1,729 | 29 | — | ||||||||||||||
| Reductions for tax positions of prior periods | — | — | (69) | ||||||||||||||
| Balance at December 31 | $ | 2,062 | $ | 333 | $ | 304 | |||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 9, 2026 | Showing above |
| 2024 | Mar 7, 2025 | |
| 2023 | Mar 11, 2024 | |
| 2022 | Mar 3, 2023 | |
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.