RAYONIER INCRYN
RAYONIER INC Income Taxes Disclosure
INCOME TAXES
(a)The year ended December 31, 2025 includes an additional dividend of $1.40 per common share, consisting of a combination of cash and the Company’s common shares. The dividend was paid December 12, 2025, to shareholders of record on October 24, 2025. This additional dividend will be considered a 2025 distribution for federal income tax purposes. The year ended December 31, 2024 includes an additional dividend of $1.80 per common share, consisting of a combination of cash and the Company’s common shares. The dividend was paid January 30, 2025, to shareholders of record on December 12, 2024. This additional dividend was considered a 2024 distribution for federal income tax purposes. The year ended December 31, 2023 includes an additional cash dividend of $0.20 per common share. The dividend was paid January 12, 2024, to shareholders of record on December 29, 2023. This additional cash dividend was considered a 2023 distribution for federal income tax purposes.
Rayonier is a REIT under the Internal Revenue Code and generally is not subject to U.S. federal or state income tax on income distributed to shareholders. As of December 31, 2025, Rayonier owns a 99.0% interest in the Operating Partnership and conducts substantially all of its timberland operations through the Operating Partnership. The taxable income or loss generated by the Operating Partnership is passed through and reported to its unitholders (including the Company) on a Schedule K-1 for inclusion in each unitholder’s income tax return.
Certain activities, including log trading and specific real estate operations, such as the entitlement, development and sale of HBU properties, are conducted through our TRS, which are subject to federal and state corporate income tax.
PROVISION FOR INCOME TAXES FROM CONTINUING OPERATIONS
Income from continuing operations before income taxes for each of the three years ended December 31 follows:
| 2025 | 2024 | 2023 | |||||||||||||||
Domestic - U.S. | $74,594 | $339,838 | $159,607 | ||||||||||||||
Total | $74,594 | $339,838 | $159,607 | ||||||||||||||
The provision for income tax (expense) benefit for each of the three years ended December 31 follows:
| 2025 | 2024 | 2023 | |||||||||||||||
Current | |||||||||||||||||
U.S. federal | ($137) | — | — | ||||||||||||||
State | (390) | (200) | (292) | ||||||||||||||
| (527) | (200) | (292) | |||||||||||||||
Deferred | |||||||||||||||||
U.S. federal | 5,296 | (2,260) | 8,386 | ||||||||||||||
State | 281 | 1,211 | 1,187 | ||||||||||||||
| 5,577 | (1,049) | 9,573 | |||||||||||||||
Changes in valuation allowance | (5,577) | 2,271 | (9,574) | ||||||||||||||
Total | ($527) | $1,022 | ($293) | ||||||||||||||
A reconciliation of the U.S. federal statutory income tax rate to the actual income tax rate for each of the three years ended December 31 follows:
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||||
| U.S. federal statutory income tax rate | ($15,665) | (21.0) | % | ($71,366) | (21.0) | % | ($33,517) | (21.0) | % | |||||||||||||||||||||||||||||
| U.S. REIT income | 15,900 | 21.3 | 77,254 | 22.7 | 42,501 | 26.6 | ||||||||||||||||||||||||||||||||
| Cellulosic Biofuel Producer tax credit | 10,500 | 14.1 | (10,814) | (3.2) | — | — | ||||||||||||||||||||||||||||||||
| Change in valuation allowance | (5,295) | (7.1) | 3,126 | 0.9 | (8,374) | (5.2) | ||||||||||||||||||||||||||||||||
| State income tax, net of federal benefit (a) | (390) | (0.5) | (200) | — | (292) | (0.2) | ||||||||||||||||||||||||||||||||
| Permanent nontaxable or nondeductible items | (218) | (0.3) | (374) | (0.1) | (462) | (0.3) | ||||||||||||||||||||||||||||||||
| Net operating loss adjustment | (5,757) | (7.7) | — | — | — | — | ||||||||||||||||||||||||||||||||
| Other | 398 | 0.5 | 3,396 | 1.0 | (149) | (0.1) | ||||||||||||||||||||||||||||||||
| Income tax (expense) benefit as reported for net income | ($527) | (0.7) | % | $1,022 | 0.3 | % | ($293) | (0.2) | % | |||||||||||||||||||||||||||||
(a)State taxes in Texas and Louisiana make up the majority of the tax effect in this category.
The Company’s effective tax rate is below the 21% U.S. statutory rate primarily due to tax benefits associated with being a REIT.
Cash taxes paid by jurisdiction for each of the three years ended December 31 follows:
| 2025 | 2024 | 2023 | |||||||||||||||
State (a) | $278 | $231 | $229 | ||||||||||||||
Total | $278 | $231 | $229 | ||||||||||||||
(a)Texas and Louisiana make up the majority of the state taxes paid.
DEFERRED TAXES
Deferred income taxes result from differences between the timing of recognizing revenues and expenses for financial book purposes versus income tax purposes. The nature of the temporary differences and the resulting net deferred tax asset/liability for the two years ended December 31 follows:
| 2025 | 2024 | ||||||||||
| Gross deferred tax assets: | |||||||||||
| Pension, postretirement and other employee benefits | $88 | $149 | |||||||||
| Cellulosic Biofuel Producer Credit tax credit carry forwards | 13,374 | — | |||||||||
| Capitalized real estate costs | 4,735 | 3,570 | |||||||||
| U.S. TRS net operating loss | 29,028 | 37,284 | |||||||||
| Other | 7,143 | 8,166 | |||||||||
| Total gross deferred tax assets | 54,368 | 49,169 | |||||||||
| Less: Valuation allowance | (53,724) | (48,147) | |||||||||
| Total deferred tax assets after valuation allowance | $644 | $1,022 | |||||||||
| Gross deferred tax liabilities: | |||||||||||
| Other | (727) | (1,105) | |||||||||
| Total gross deferred tax liabilities | (727) | (1,105) | |||||||||
| Net deferred tax liability reported as noncurrent | ($83) | ($83) | |||||||||
Net operating loss (“NOL”) and tax credit carryforwards as of the two years ended December 31 follows:
| Tax Effected Balance | Expiration | ||||||||||
| 2025 | |||||||||||
| U.S. Federal NOL Carryforwards- Post TCJA (a) | $24,438 | None | |||||||||
| U.S State NOL Carryforwards (b) | 4,590 | Various | |||||||||
| Cellulosic Biofuel Producer Credit (c) | 13,374 | 2027 | |||||||||
| 2024 | |||||||||||
| U.S. Federal NOL Carryforwards- Post TCJA (a) | $32,451 | None | |||||||||
| U.S State NOL Carryforwards (b) | 4,833 | Various | |||||||||
| Cellulosic Biofuel Producer Credit | — | 2024 | |||||||||
(a)The Tax Cuts and Jobs Act (TCJA) was signed into law on December 22, 2017. The TCJA lifted the 20-year federal NOL Carryforward period. Net operating losses generated after December 31, 2017 have an indefinite carryforward period.
(b)The U.S. state NOL is made up of several jurisdictions that expire in various future years. No state NOL is set to expire before December 31, 2033.
(c)The One, Big, Beautiful Bill Act (P.L. 119-21) was signed into law on July 4, 2025. This act allowed unused cellulosic or second generation biofuel producer credits that expired in 2024 to be claimed for an additional three years.
We record a valuation allowance to reduce the carrying amounts of deferred tax assets if it is more likely than not that such deferred tax assets will not be realized. Since 2015, we have had a 100% valuation allowance against the U.S. taxable REIT subsidiary's deferred tax assets, net of deferred tax liabilities. During 2025, the net deferred tax assets increased by $5.6 million. As a result, we recorded a change in the valuation allowance of $5.6 million related to the U.S. TRS's deferred tax assets, net of liabilities.
TAX STATUTES
Rayonier L.P., the Operating Partnership, remains subject to U.S. Internal Revenue Service examinations for the 2021 through 2024 tax years. All other REIT and TRS entities remain open for the 2022 through 2024 tax years.
TAX CHARACTERISTICS OF DIVIDEND DISTRIBUTIONS
The taxable nature of the dividend distributions paid for each of the three years ended December 31 follows:
| 2025 | 2024 | 2023 | |||||||||||||||
Total dividends/distributions paid per common share/unit (a) | $2.49 | $2.94 | $1.34 | ||||||||||||||
| Tax characteristics: | |||||||||||||||||
| Capital gain | 100 | % | 100 | % | 100 | % | |||||||||||
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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.