PAMT CORP Income Taxes Disclosure

12.	FEDERAL AND STATE INCOME TAXES

 

The Company prospectively applied Accounting Standards Update (“ASU”) No. 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”). As such, information presented below for 2024 and 2023 has not been recast to conform to current-year presentation.

 

Net loss before income taxes for the year ended December 31 are as follows:

 

		2025
		(in thousands)
Domestic			(70,288	)
Foreign			-
Total (loss) before income taxes		$	(70,288	)

 

The provision (benefit) for income taxes consisted of the following components for the following years ended December 31:

 

		2025				2024				2023
		(in thousands)
Current:
Federal		$	436			$	945			$	4,697
State			741				1,089				2,580
Total current income tax provision			1,177				2,034				7,277
Deferred:
Federal			(15,277	)			(9,248	)			944
State			(3,581	)			(2,537	)			1,942
Total deferred income tax provision			(18,858	)			(11,785	)			2,886
Total income tax provision expense		$	(17,681	)		$	(9,751	)		$	10,163

 

After the adoption of ASU 2023-09, the reconciliation between the provision for income taxes for the year December 31, 2025 and the amounts computed using the federal statutory rate in effect is presented in the following table:

 

		2025
		Amount				Percent
Federal income tax at statutory rate		$	(14,760	)			21.0
State income taxes, net of federal income tax effect (1)			(2,840	)			4.0
Tax Credits
Federal fuel tax credit			(64	)			0.1
Nontaxable and nondeductible items
Nondeductible per-diem paid to drivers			152				(0.2	)
Dividend received deduction			(162	)			0.2
Other			98				(0.1	)
Other Adjustments			(105	)			0.2
Total income tax (benefit) expense		$	(17,681	)			25.2	%

 

(1)

The states and local jurisdictions that contribute to the majority (greater than 50%) of the tax effect in this category include Arkansas, Pennsylvania and Tennessee. Deferred state income taxes are calculated using a blended state tax rate and are not attributed to specific states. Accordingly, the states disclosed are based on current state income tax expense.

 

The reconciliation between the computed provision for income taxes and the amounts computed using the federal statutory rate for the years ended December 31 prior to the adoption of ASU 2023-09 is presented in the following table:

 

		2024								2023
		Amount				Percent				Amount				Percent
Federal income tax at statutory rate		$	(8,725	)			21.0			$	6,002				21.0
Federal income tax effects of:
State income taxes			(860	)			2.1				(2,038	)			(7.1	)
Nondeductible per diem and meals			247				(0.6	)			371				1.3
Other			1,035				(2.5	)			1,306				4.6
Federal income tax provision			(8,302	)			20.0				5,641				19.8
State income tax provision			(1,449	)			3.5				4,522				15.8
Total income tax (benefit) expense		$	(9,751	)			23.5			$	10,163				35.6

 

Under GAAP, deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and for income tax reporting purposes. Significant components of the Company’s deferred tax liabilities and assets at December 31 are as follows:

 

		2025				2024
		(in thousands)
Deferred tax liabilities:
Depreciation & basis differences for property, plant and equipment		$	98,072			$	89,960
Unrealized gains on securities			5,215				3,987
Prepaid expenses			2,466				2,880
Total deferred tax liabilities			105,753				96,827
Deferred tax assets:
Net operating loss carryover			22,007				-
Accrued Expenses			7,866				1,063
Current expected credit losses			2,166				1,708
Disallowed interest expense under Sec. 163(j)			-				1,509
Other			25				-
Total deferred tax assets			32,064				4,280
Net deferred tax liability		$	73,689			$	92,547

 

Income taxes paid, net of refunds received, during the year ended December 31, 2025 were as follows:

 

		2025
		(in thousands)
Federal			-
State
Arkansas			400
Tennessee			110
Louisiana			85
Alabama			65
Pennsylvania			53
Georgia			45
Other (net refund)			(122	)
Total income taxes paid, net of refunds		$	636

 

Income taxes paid, net of refunds received totaled $0.5 million in 2024, while income taxes paid, net of refunds received totaled $5.5 million in 2023.

 

On July 4, 2025, the United States Congress passed budget reconciliation bill H.R. 1 referred to as the One Big Beautiful Bill (the “OBBB”). Among other provisions, the legislation reinstated 100% bonus depreciation for qualifying property acquired and placed in service after January 19, 2025, and modified the limitation on business interest expense under Internal Revenue Code Section 163(j) to be based on 30% of adjusted taxable income determined using an EBITDA measure, rather than EBIT. The OBBB has multiple effective dates with certain provisions effective in 2025 and others implemented through 2027. The relevant items contained in the bill increased our deferred tax liability and reduced federal income tax liability in 2025, with no material impact on the 2025 effective tax rate.

 

As a result of these provisions, the Company recorded accelerated depreciation deductions and recognized previously disallowed interest expense, which collectively increased current-year deductible expenses and are expected to result in a federal net operating loss of $85.5 million for the year ended December 31, 2025. The enactment of the OBBBA resulted in a material impact to the Company’s current and deferred income tax balances reflected on the condensed consolidated balance sheet and income statement for the year ended December 31, 2025.

 

In determining whether a tax asset valuation allowance is necessary, management, in accordance with the provisions of Accounting Standards Codification (“ASC”) 740-10-30, weighs all available evidence, both positive and negative to determine whether, based on the weight of that evidence, a valuation allowance is necessary. If negative conditions exist which indicate a valuation allowance might be necessary, consideration is then given to what effect the future reversals of existing taxable temporary differences and the availability of tax strategies might have on future taxable income to determine the amount, if any, of the required valuation allowance. As of December 31, 2025, management determined that the future reversals of existing taxable temporary differences and available tax strategies would generate sufficient future taxable income to realize its tax assets and therefore a valuation allowance was not necessary.

 

The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the position will be sustained on examination by taxing authorities, based on the technical merits of the position. As of December 31, 2025, an adjustment to the Company’s consolidated financial statements for uncertain tax positions has not been required as management believes that the Company’s tax positions taken in income tax returns filed or to be filed are supported by clear and unambiguous income tax laws. The Company recognizes interest and penalties related to uncertain income tax positions, if any, in income tax expense. During 2025 and 2024, the Company has not recognized or accrued any interest or penalties related to uncertain income tax positions.

 

The Company and its subsidiaries are subject to U.S. and Canadian federal income tax laws as well as the income tax laws of multiple state jurisdictions. The major tax jurisdictions in which we operate generally provide for a deficiency assessment statute of limitation period of three years and as a result, the Company’s tax years 2022 and forward remain open to examination in those jurisdictions.