SIGA TECHNOLOGIES INC Income Taxes Disclosure

10. Income Taxes

 

The components of income before provision for income taxes are as follows:

 

		For the year ended December 31,
		2025				2024				2023
Domestic		$	30,332,374			$	76,037,694			$	87,700,647
Foreign			49,646				32,696				76,026
Income before income taxes		$	30,382,020			$	76,070,390			$	87,776,673

 

The provision for income taxes consists of the following: 

 

		For the year ended December 31,
		2025				2024				2023
Current Tax Expense:
U.S. Federal		$	401,196			$	16,526,685			$	23,698,658
State and local			264,575				131,813				792,477
Foreign			10,924				4,260				14,445
Total current tax expense		$	676,695			$	16,662,758			$	24,505,580
Deferred Tax Expense (Benefit):
U.S. Federal		$	6,423,013			$	294,028			$	(4,711,556	)
State and local			3,169				(100,612	)			(86,177	)
Foreign			—				—				—
Total deferred tax expense (benefit)		$	6,426,182			$	193,416			$	(4,797,733	)
Total provision for income taxes		$	7,102,877			$	16,856,174			$	19,707,847

 

The effective income tax rate differs from the federal statutory income tax rate of 21% as follows:

 

		For the year ended December 31,
		2025								2024								2023
			Amount				Percent				Amount				Percent				Amount				Percent
U.S. Federal Statutory Rate		$	6,380,224				21.0	%		$	15,974,780				21.0	%		$	18,433,101				21.0	%
State Income Taxes, net of Federal Effect (1)			129,342				0.4	%			75,573				0.1	%			53,680				0.1	%
Nontaxable or nondeductible items:
Executive compensation			701,870				2.3	%			1,122,154				1.5	%			389,494				0.4	%
Other			(57,828	)			-0.2	%			203,399				0.3	%			279,437				0.3	%
Effect of cross-border tax laws			(134,354	)			-0.4	%			(466,620	)			-0.6	%			—				0.0	%
Changes in unrecognized tax benefits			82,826				0.3	%			(50,506	)			-0.1	%			504,052				0.6	%
Other			299				0.0	%			—				0.0	%			49,604				0.1	%
Foreign Tax Effects			498				0.0	%			(2,606	)			0.0	%			(1,521	)			0.0	%
Total		$	7,102,877				23.4	%		$	16,856,174				22.2	%		$	19,707,847				22.5	%

 

⁽¹⁾ State income taxes in Oregon and Texas comprise the majority (greater than 50%) of the tax effect in this category. 

 

Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets for federal and state income taxes are as follows:

 

		For the year ended December 31,
		2025				2024
Deferred Tax Assets:
State Net operating losses		$	1,163,061			$	1,166,400
Inventory			403,591				400,783
Reserves and Accruals			687,598				85,716
Shared-based compensation			461,581				539,738
Fixed assets			123,287				28,213
Deferred revenue			2,314,452				2,232,060
Capitalized R&D			7,474				7,028,480
Lease liability			171,597				294,503
Other			522,739				500,726
Deferred tax assets before valuation allowance		$	5,855,380			$	12,276,619
Less: valuation allowance			(918,818	)			(921,456	)
Total deferred tax assets, net of valuation allowance		$	4,936,562			$	11,355,163
Deferred Tax Liabilities:
Amortization of goodwill			(203,042	)			(194,093	)
Other			(305,001	)			(306,368	)
Total deferred tax liabilities		$	(508,043	)		$	(500,461	)
Net deferred tax assets (liabilities)		$	4,428,519			$	10,854,702

 

The Company's valuation allowance decreased by $2,638 during the year ended December 31, 2025.

 

Income taxes paid, net of refunds received consisted of the following:

 

		For the year ended December 31,
		2025				2024				2023
U.S. Federal		$	8,000,300			$	30,254,812			$	3,347,492
State and Local			187,836				94,579				145,032
Foreign			12,837				8,356				8,349
Net cash paid for income taxes		$	8,200,973			$	30,357,747			$	3,500,873

 

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows:

 

 

		For the year ended December 31,
		2025				2024				2023
Beginning Balance		$	4,692,629			$	5,081,610			$	5,103,548
Additions			4,133				51,227				—
Reductions			—				—				(17,096	)
Settlements			—				—				—
Lapses in statutes of limitations			(998,649	)			(440,208	)			(4,842	)
Ending Balance		$	3,698,113			$	4,692,629			$	5,081,610

 

During the years ended December 31, 2025 and 2024, the Company recorded an income tax expense of $431,000 and $101,000, respectively, related to the accrual of interest and penalties. 

 

On July 4, 2025, President Trump signed OBBBA into law. The OBBBA makes permanent many of the provisions previously enacted as part of the 2017 Tax Cut and Jobs Act that were set to expire at the end of 2025 and includes other changes to certain U.S. corporate tax provisions including the restoration of immediate expensing for domestic research and development expenditures and the reinstatement of 100% bonus depreciation for qualified property. In accordance with the authoritative guidance under ASC 740, the Company is required to recognize the effects of the enacted tax law changes in its income tax provision in the period enacted.  Although the OBBBA had many taxpayer-favorable provisions, the OBBBA did not have a material impact on the Company’s effective tax rate.

 

The Company files income tax returns in the U.S. federal jurisdiction and various state and local tax jurisdictions. The federal tax years open to examination are 2022 to 2025. The Company's state and local tax years that are open to tax examination are generally 2021 to 2025.