Volato Group, Inc.SOAR
Volato Group, Inc. Income Taxes Disclosure
INCOME TAXES
The Company is subject to U.S. federal, state, and local income taxes. The Components of income tax expense for the year ended December 31, 2025 are as follows:
| Year Ended December 31, | |||||
| 2025 | |||||
| Current | |||||
| Federal | $ | 737 | |||
| State | 300 | ||||
| Total income taxes | $ | 1,037 | |||
Management has determined that the Company does not have any uncertain tax positions and associated unrecognized benefits that would impact the consolidated financial statements or related disclosures.
Deferred income tax assets and liabilities are computed annually for differences between financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has historically operated at a loss without enough historical evidence of positive income from operations. As a result, the deferred tax asset is offset by a corresponding valuation allowance.
The net deferred tax assets and liabilities consist of the following amounts at December 31, 2025 and 2024, in thousands:
| 2025 | 2024 | |||||||||||||
| Deferred Tax Assets | ||||||||||||||
| Capital loss carryover | $ | 140 | $ | — | ||||||||||
| Net operating loss carryforwards | 17,774 | 18,398 | ||||||||||||
| Intangible | 462 | 530 | ||||||||||||
| Interest expense limitations | 2,702 | 2,484 | ||||||||||||
| Other | 60 | 47 | ||||||||||||
| Total deferred tax assets | 21,138 | 21,459 | ||||||||||||
| Valuation Allowance | (20,699) | (21,738) | ||||||||||||
| Total net deferred tax assets | 439 | (279) | ||||||||||||
| Deferred Tax Liabilities | ||||||||||||||
| Property and equipment depreciation | (9) | (25) | ||||||||||||
| flyExclusive investment | (16) | — | ||||||||||||
| Installment sale deferred tax liability | (414) | — | ||||||||||||
| Total deferred tax liabilities | (439) | (25) | ||||||||||||
| Net deferred tax assets (liabilities) | $ | — | $ | (305) | ||||||||||
The Company has federal operating losses carryforward of approximately $70 million and $73 million available as of December 31, 2025 and 2024, respectively, to reduce future taxable income at the federal level, and it has net operating losses of approximately $67 million and $68 million at the state level, to offset future state taxable income, respectively.
The effective tax rate on income differed from the federal statutory rate of 21% for the years ended December 31, 2025 and 2024, for the following reasons:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| U.S. Federal tax/(benefit) at statutory rate | $ | 1,304 | 21.00 | % | $ | (8,500) | 21.00 | % | |||||||||
| State and local income taxes, net of federal income tax effects * | 300 | 4.83 | % | $ | 22 | (0.05) | % | ||||||||||
| Changes in valuation allowance | (1,108) | (17.84) | % | $ | 7,257 | (17.93) | % | ||||||||||
| Non-deductible items: | |||||||||||||||||
| Other | 117 | 1.89 | % | $ | 714 | (1.76) | % | ||||||||||
| Convertible note fair value adjustment | 424 | 6.83 | % | $ | — | — | % | ||||||||||
| Effective income tax rate | $ | 1,037 | 16.71 | % | $ | (507) | 1.25 | % | |||||||||
_____________________________
*State tax expense is primarily attributable to South Carolina and Florida, which represented approximately 83.7% and 13.5% respectively, of total state and local income tax expense for the period. State income tax expense attributable to all other jurisdictions was not individually material.
The Company’s U.S. tax returns are subject to examination by federal and state taxing authorities. The years open to examination by Federal, state, local and foreign government authorities vary by jurisdiction, but the statute of limitation is generally three years from the date the tax return is filed. For jurisdictions, including Federal, that have generated net operating losses, carryovers may be subject to the statute of limitations applicable for the year those carryovers are utilized. In these cases, the period for which the losses may be adjusted will extend to conform with the statute of limitations for the year in which the losses are utilized. In most circumstances, this is expected to increase the length of time that the applicable taxing authority may examine the carryovers by one year or longer, in limited cases.
We have not recorded any amount related to uncertainty in income taxes pursuant to ASC Topic 740, as we believe all tax positions are more likely than not to be sustained upon examination by the taxing authorities.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 12, 2026 | Showing above |
| 2024 | Mar 31, 2025 | |
| 2023 | Mar 26, 2024 | |
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.