Vivid Seats Inc. Income Taxes Disclosure

20. Income Taxes

VSI is subject to U.S. federal and state income taxes with respect to our allocable share of any taxable income (loss) of Hoya Intermediate, other subsidiaries of VSI, and any standalone income (loss) we generate. Hoya Intermediate is organized as a limited liability company, whereas the other subsidiaries of VSI are treated as corporations and will separately file and pay taxes apart from VSI in various jurisdictions, including the United States (federal, state, and local), Canada, Japan, Luxembourg, and the United Kingdom.

For periods prior to the Corporate Simplification, Hoya Intermediate was treated as a partnership for federal and state income tax purposes and was generally not subject to entity level income taxes. During those periods, Hoya Intermediate’s taxable income (loss) was passed through to its members, including VSI and Hoya Topco, each of whom were responsible for their own U.S. federal and state income taxes. Following the Corporate Simplification, Hoya Intermediate continued to be treated as a partnership, with VSI now indirectly holding all of its units. See Note 1, Background and Basis of Presentation, for more information.

During the three months and year ended December 31, 2025, VSI also completed an internal legal entity restructuring to further simplify its organizational structure and align its U.S. operations within a single U.S.

consolidated tax group. The restructuring included a series of stock and partnership interest contributions leading to the conversion of Hoya Intermediate from a partnership to a disregarded entity for U.S. federal and state income tax purposes, with VSI continuing to hold all of its units. As a result, we now account for our deferred taxes related to the operations of Hoya Intermediate based on the financial accounting to income tax basis differences of the assets and liabilities held by Hoya Intermediate, where prior to the Corporate Simplification and the legal entity restructuring, we accounted for our deferred taxes related to the operations of Hoya Intermediate based on the financial accounting to income tax basis differences of our investment in Hoya Intermediate.

We adopted ASU 2023-09 on a prospective basis beginning with the year ended December 31, 2025. The following table presents the required disclosure pursuant to ASU 2023-09 and reconciles the U.S. federal statutory income tax expense and rate to our actual global effective income tax expense and rate for the year ended December 31, 2025 (in thousands, except percentages):

We recognize deferred tax assets to the extent we believe these assets are more likely than not to be realized. As of December 31, 2025, we maintained a $200.3 million valuation allowance against the tax benefits of our U.S. net deferred tax assets because we determined these assets are not more likely than not to be realized as of December 31, 2025. In making this determination, we considered all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income (loss), tax planning strategies, and recent results of operations.

Excluded from the deferred tax asset for investment in partnership at December 31, 2024 is a portion of the income tax basis in the partnership investment that will only reverse upon sale as a capital loss. As we do not expect to have sufficient sources of future capital gains to offset this future capital loss, we have not disclosed a deferred tax asset for this portion of the basis difference in the investment in the partnership, nor the associated valuation allowance. We disclose the deferred tax asset associated with items expected to be recovered through ordinary business operations; however, the portion of deferred tax asset disclosed for which no ordinary tax benefit is expected due to partnership allocation rules is offset by a valuation allowance.

As of June 30, 2023, in part because in the current year we entered into a cumulative income position in the U.S. federal tax jurisdiction, we determined that there was sufficient positive evidence to conclude that it was more likely than not that deferred tax assets of $31.3 million associated with our investment in partnership, U.S. net operating losses, interest expense limitations, and tax credit carryforwards were realizable. We therefore reduced the valuation allowance accordingly.

As of December 31, 2024, after reassessing the realizability of our deferred tax assets, we reduced the valuation allowance by $6.1 million associated with the investment in partnership deferred tax asset.

As of June 30, 2025, in part because during the three months ended June 30, 2025 we (i) recorded a significant impairment of our goodwill and certain indefinite-lived intangible assets, (ii) entered into a cumulative loss position, and (iii) had a negative trend in earnings in the United States, we determined that there was sufficient negative evidence to conclude that our U.S. deferred tax assets associated with our investment in partnership, TRA, U.S. net operating losses, interest expense limitations, and tax credit carryforwards were not realizable. We therefore increased the valuation allowance accordingly. As of December 31, 2025, we maintained a valuation allowance against our net U.S. deferred tax assets of $200.3 million, as these assets are not more likely than not to be realized.

At December 31, 2025, we had U.S. federal and state deferred interest carryforwards totaling $60.8 million, U.S. state operating loss carryforwards totaling $50.5 million, and U.S. federal operating loss carryforwards totaling $161.2 million. Certain of the U.S. federal and state operating loss carryforwards begin to expire in 2029 with the remainder of the U.S. federal and state net operating loss carryforwards having no expiration date. Certain tax attributes remain subject to an annual limitation under Section 382 of the Internal Revenue Code of 1986 (as amended, the “Code”), as a result of the historical acquisitions.

At December 31, 2025, with respect to our operations outside the United States, we had foreign operating loss carryforwards totaling $2.7 million, which begin to expire in 2037.

At December 31, 2025, we were not indefinitely reinvested on undistributed earnings from our foreign operations. The deferred tax liability associated with the future repatriation of these earnings was $0.1 million.

ASC Topic 740, Income Taxes, prescribes a recognition threshold of more likely than not to be sustained upon examination as it relates to the accounting for uncertainty in income tax benefits recognized in an enterprise’s financial statements. The following table summarizes the changes in the carrying amount of our unrecognized benefits related to a tax refund during the years ended December 31, 2025, 2024, and 2023 (in thousands):

We are subject to routine audits by taxing jurisdictions. The periods subject to tax audits are 2021 through 2025. There are currently no audits for any tax periods in progress.

TRA

In connection with the Merger Transaction, we entered into the TRA with the existing Hoya Intermediate unitholders that provided for our payment to such unitholders of 85% of the amount of any tax savings that we realize (or, under certain circumstances, are deemed to realize) as a result of, or attributable to: (i) increases in the tax basis of assets owned directly or indirectly by Hoya Intermediate or its subsidiaries from, among other things, any redemptions or exchanges of Intermediate Units; (ii) existing tax basis (including depreciation and amortization deductions arising from such tax basis) in long-lived assets owned directly or indirectly by Hoya Intermediate or its subsidiaries; and (iii) certain other tax benefits (including deductions in respect of imputed interest) related to us making payments under the TRA.

In connection with the 2023 Secondary Offerings, Hoya Topco exchanged Intermediate Units and, as a result, we recorded a liability of $165.2 million, a deferred tax asset of $75.2 million related to the 2023 Secondary Offerings and projected payments under the TRA, a decrease to Additional paid-in capital of $95.8 million, and a $5.8 million income tax benefit related to valuation allowance releases on the portion of the deferred tax asset associated with

the basis difference in the investment in the partnership excluded from the disclosure of deferred tax asset and valuation allowance. We also recognized an income tax benefit of $14.0 million related to the release of valuation allowances at the time of the 2023 Secondary Offerings.

As of June 30, 2025, we determined that it was no longer probable that we will generate sufficient future taxable income to support a significant amount of the balance of the TRA liability previously recorded. After evaluating all available positive and negative evidence, we determined that significant negative objective and verifiable evidence (including cumulative losses generated by our domestic operations) existed to change our conclusion regarding the future realization of our deferred tax assets, which therefore significantly impacts the amount of future TRA payments that are probable to be made. As a result, the TRA liability was reduced by $149.2 million, which is recorded in Other income – net in the Consolidated Statements of Operations.

In connection with the Corporate Simplification, all rights and obligations under the TRA were terminated (other than certain terms thereof that expressly survived), including $5.8 million of cash payments that would have otherwise been due in the first quarter of 2026, in exchange for the issuance of 403,022 shares of Class A common stock. As a result of the Corporate Simplification, we will no longer have a TRA liability. The termination of the TRA liability resulted in the recognition of a $0.9 million gain, which is recorded in Other income – net in the Consolidated Statements of Operations. See Note 1, Background and Basis of Presentation, for more information.

OBBB Act

On July 4, 2025, a reconciliation bill commonly referred to as the One Big Beautiful Bill Act (the “OBBB Act”) was signed into law, which included a broad range of tax reform provisions that may affect our financial results. The OBBB Act allows an elective deduction for domestic research and development, a reinstatement of elective 100% first-year bonus depreciation, and modifications to the calculation for excess business interest expense limitations under Section 163(j) of the Code. Our analysis shows that the OBBB Act did not have a material impact on our consolidated financial statements during the year ended December 31, 2025. We will continue to monitor regulatory guidance and interpretations as they are issued.