Where Food Comes From, Inc. Income Taxes Disclosure
Note 10 - Income Taxes
The provision for income taxes consists of the following (in thousands):
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Current income tax expense / (benefit): | ||||||||
| Federal | $ | 392 | $ | 611 | ||||
| State | 245 | 163 | ||||||
| Foreign | (5 | ) | ||||||
| Total current income tax expense | 637 | 769 | ||||||
| Deferred income tax expense: | ||||||||
| Federal | 83 | 77 | ||||||
| State | (27 | ) | 13 | |||||
| Total deferred income tax expense | 56 | 90 | ||||||
| Federal | $ | 475 | $ | 688 | ||||
| State | 218 | 176 | ||||||
| Foreign | (5 | ) | ||||||
| Total income tax expense | $ | 693 | $ | 859 | ||||
Where Food Comes From, Inc.
Notes to the Consolidated Financial Statements
Income taxes paid (net of refunds) by jurisdiction:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Federal | $ | 285 | $ | 997 | ||||
| State | 154 | 239 | ||||||
| Foreign | ||||||||
| Net income taxes paid | 439 | 1,236 | ||||||
Income taxes paid in the following jurisdictions exceeded five percent (5%) of total income taxes paid (net of refunds):
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| California | $ | * | $ | 65 | ||||
| Kansas | $ | 80 | $ | * | ||||
| * | Jurisdiction below the threshold for the period presented |
The reconciliation of income taxes calculated at the statutory rates to our effective tax rate is as follows (in thousands):
| December 31, | ||||||||||||||||
| 2025 | 2024 | |||||||||||||||
| Expected tax expense | $ | 468 | 21.0 | % | $ | 625 | 21.0 | % | ||||||||
| State tax provision, net | 167 | 7.5 | % | 107 | 3.6 | % | ||||||||||
| Permanent differences | 10 | 0.3 | % | |||||||||||||
| Foreign | 47 | 2.1 | % | 66 | 2.2 | % | ||||||||||
| Other, net | 11 | 0.5 | % | 51 | 1.8 | % | ||||||||||
| Total income tax expense | $ | 693 | 31.1 | % | $ | 859 | 28.9 | % | ||||||||
The income tax effects of temporary differences that give rise to significant portions of deferred tax assets (liabilities) are as follows (in thousands):
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Deferred tax assets (liabilities): | ||||||||
| Accruals and other | $ | 152 | $ | 148 | ||||
| Stock based compensation | 122 | 124 | ||||||
| Property and equipment | 120 | 123 | ||||||
| Intangibles assets | (95 | ) | (39 | ) | ||||
| Net deferred tax assets | 299 | 356 | ||||||
Where Food Comes From, Inc.
Notes to the Consolidated Financial Statements
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 15, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Feb 18, 2021 | |
| 2019 | Mar 5, 2020 | |
| 2018 | Mar 29, 2019 | |
| 2017 | Apr 2, 2018 | |
| 2016 | Feb 28, 2017 | |
| 2015 | Feb 16, 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.