SKYX Platforms Corp. Income Taxes Disclosure
NOTE 9 INCOME TAXES
The Company has not paid or incurred any income taxes liabilities during 2025 and 2024 due to its net operating losses. State taxes are apportioned through 47 states. The states in which the apportionment are greatest are California and Florida, which comprise 22% of the effective state and local effective tax rate.
The effects of temporary differences that gave rise to significant portions of deferred tax assets at December 31, 2025, and December 31, 2024 were approximately as follows:
| For the year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Net operating loss carryforward | 34,436,504 | $ | 28,458,816 | |||||
| Stock-based compensation | 3,930,195 | 2,707,630 | ||||||
| Rights of use assets | (4,429,142 | ) | (5,023,531 | ) | ||||
| Operating lease liabilities | 5,157,627 | 5,634,917 | ||||||
| Other | 933,102 | 487,722 | ||||||
| Less Valuation Allowance | (40,028,287 | ) | (32,265,553 | ) | ||||
| Total Deferred Tax Assets - Net | $ | $ | ||||||
The change in valuation allowance is as follows:
| For the year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Net operating loss | $ | 5,977,689 | $ | 7,141,156 | ) | |||
| Fair value of options | 1,222,565 | 1,603,333 | ||||||
| Other, mostly amortization of intangible assets | 696,875 | ) | 915,218 | |||||
| Change in valuation allowance | 7,897,129 | 9,659,709 | ||||||
| $ | $ | |||||||
The Company’s tax expense differs from the statutory tax expense for the years ended December 31, 2025, and December 31, 2024 and the reconciliation is as follows.
2025 Amount | 2025 Percent | 2024 Amount | 2024 Percent | |||||||||||||
| $ | 7,017,227 | 21 | % | $ | 7,498,169 | 21 | % | |||||||||
| States and local income taxes, net of federal income tax effect | 1,438,709 | 4.3 | 1,535,339 | 4.3 | % | |||||||||||
| Changes in valuation allowance | (7,897,129 | ) | (23.6 | )% | (9,659,709 | ) | (27.1 | )% | ||||||||
| Other | (558,807 | ) | (1.7 | )% | 626,201 | 1.8 | % | |||||||||
| Effective tax rate | $ | - | % | $ | - | % | ||||||||||
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 26, 2026 | Showing above |
| 2024 | Mar 24, 2025 | |
| 2023 | Apr 1, 2024 | |
| 2022 | Mar 31, 2023 | |
| 2017 | Apr 2, 2018 | |
| 2016 | Mar 31, 2017 | |
| 2015 | Mar 30, 2016 | |
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.