WillScot Holdings CorpWSC
WillScot Holdings Corp Income Taxes Disclosure
Income Taxes
(a) Includes $15.8 of presentational adjustments with no effect on amounts presented in the consolidated balance sheet or the annual effective tax rate for the year ended December 31, 2024.
The components of income tax expense from continuing operations for the years ended December 31, were comprised of the following:
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Current | |||||||||||||||||
| Federal | $ | (8,660) | $ | 29,518 | $ | — | |||||||||||
| State | 7,985 | 17,457 | 12,250 | ||||||||||||||
| Foreign | 5,257 | 6,823 | 7,382 | ||||||||||||||
| Deferred | |||||||||||||||||
| Federal | 6,192 | (23,990) | 80,698 | ||||||||||||||
| State | (5,829) | (19,197) | 27,276 | ||||||||||||||
| Foreign | (7,376) | (2,136) | (1,031) | ||||||||||||||
| Total income tax (benefit) expense from continuing operations | $ | (2,431) | $ | 8,475 | $ | 126,575 | |||||||||||
Income tax expense from continuing operations differed from the amount computed by applying the US statutory income tax rate of 21% to the income from continuing operations before income taxes for the year ended December 31, 2025 as follows:
| (in thousands) | Amount | Percent | |||||||||
| Loss from continuing operations before income tax | |||||||||||
| US | $ | (45,819) | |||||||||
| Foreign | (9,602) | ||||||||||
| Total loss from continuing operations before income tax | $ | (55,421) | |||||||||
| Provision for income taxes at U.S. federal statutory rate | $ | (11,638) | 21.0 | % | |||||||
State and Local income taxes, net of federal benefit (a) | 1,359 | (2.5) | % | ||||||||
| Foreign rate effects | (103) | 0.2 | % | ||||||||
| Tax Credits | |||||||||||
| Investment Tax Credits | (1,692) | 3.1 | % | ||||||||
| Nontaxable or nondeductible items | |||||||||||
| Non-deductible compensation | 5,418 | (9.8) | % | ||||||||
| Stock compensation shortfall | 1,731 | (3.1) | % | ||||||||
| Other | 1,052 | (1.9) | % | ||||||||
| Changes in unrecognized tax benefits. | 341 | (0.6) | % | ||||||||
| Other | 1,101 | (2.0) | % | ||||||||
| Effective Tax Rate | $ | (2,431) | 4.4 | % | |||||||
(a) The State of Texas contributes to the majority (greater than 50%) of the tax effect in this category.
Income tax expense from continuing operations differed from the amount computed by applying the US statutory income tax rate of 21% to the income from continuing operations before income taxes as follows for the years ended December 31,
| (in thousands) | 2024 | 2023 | |||||||||
| Income from continuing operations before income tax | |||||||||||
| US | $ | 18,686 | $ | 444,557 | |||||||
| Foreign | 17,918 | 23,862 | |||||||||
| Total income from continuing operations before income tax | $ | 36,604 | $ | 468,419 | |||||||
| US Federal statutory income tax expense | $ | 7,687 | $ | 98,368 | |||||||
| Effect of tax rates in foreign jurisdictions | 1,175 | 1,434 | |||||||||
| State income tax expense, net of federal benefit | 784 | 25,412 | |||||||||
| Valuation allowances | 2,776 | (815) | |||||||||
| Non-deductible (non-taxable) items | 677 | 775 | |||||||||
| Non-deductible executive compensation | 1,813 | 2,014 | |||||||||
| Tax credits | (6,988) | (396) | |||||||||
| Uncertain tax positions | (791) | (523) | |||||||||
Tax law changes (excluding valuation allowance)(a) | (166) | (50) | |||||||||
| Other | 1,508 | 356 | |||||||||
| Income tax expense from continuing operations | $ | 8,475 | $ | 126,575 | |||||||
| Effective income tax rate | 23.15 | % | 27.02 | % | |||||||
(a) Tax law changes primarily represent changes in tax law in foreign jurisdictions.
The amounts of cash taxes paid by the Company in the year ended December 31, 2025 are as follows:
| (in thousands) | 2025 | ||||
| Federal | $ | — | |||
| State and Local | |||||
| California | 2,113 | ||||
| Texas | 1,581 | ||||
| Other | 7,406 | ||||
| Total State and Local | 11,100 | ||||
| Foreign | |||||
| Canada | 2,796 | ||||
| Mexico | 2,316 | ||||
| Other | 101 | ||||
| Total Foreign | 5,213 | ||||
| Income taxes paid, net of amounts refunded | $ | 16,313 | |||
Deferred Income Taxes
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities and their tax bases, as well as net operating losses and carryforwards. Significant components of the Company’s deferred tax assets and liabilities as of December 31 were as follows:
| (in thousands) | 2025 | 2024 | |||||||||
| Deferred tax assets | |||||||||||
| Deferred interest expense | $ | 108,629 | $ | 118,228 | |||||||
| Employee benefit plans | 7,999 | 10,408 | |||||||||
| Accrued liabilities | 5,128 | 5,011 | |||||||||
| Allowance for credit losses | 15,885 | 25,828 | |||||||||
| Deferred revenue | 59,999 | 60,907 | |||||||||
| Operating lease liability | 78,275 | 66,925 | |||||||||
| Other | 10,613 | 12,397 | |||||||||
| Tax loss carryforwards | 49,515 | 75,312 | |||||||||
| Deferred tax assets, gross | 336,043 | 375,016 | |||||||||
| Valuation allowance | (4,235) | (4,206) | |||||||||
| Net deferred income tax asset | 331,808 | 370,810 | |||||||||
| Deferred tax liabilities | |||||||||||
| Rental equipment and other property, plant and equipment | (734,548) | (791,853) | |||||||||
| Intangible assets | (11,495) | (18,106) | |||||||||
| Right of use asset | (77,478) | (66,508) | |||||||||
| Deferred tax liability | (823,521) | (876,467) | |||||||||
| Net deferred income tax liability | $ | (491,713) | $ | (505,657) | |||||||
Tax loss carryforwards as of December 31, 2025 are outlined in the table below and include US Federal and US state activity. The availability of these tax losses to offset future income varies by jurisdiction. Furthermore, the ability to utilize the tax losses may be subject to additional limitations upon the occurrence of certain events, such as a change in the ownership of the Company. Some of the Company’s tax attributes are subject to annual limitations due to historical changes in ownership from acquisitions, mergers or other related ownership shift events; however, the Company anticipates that our remaining available net operating losses will be consumed prior to their expiration. The Company’s tax loss carryforwards are as follows at December 31, 2025:
| (in thousands) | Loss Carryforward | Deferred Tax | Expiration | ||||||||||||||
| Jurisdiction: | |||||||||||||||||
| US - Federal | $ | 180,825 | $ | 38,102 | 2031, Indefinite | ||||||||||||
| US - State capital loss | 50,078 | 2,868 | 2029 | ||||||||||||||
| US - State | 187,047 | 8,545 | 2026 – 2044, Indefinite | ||||||||||||||
| Total | $ | 417,950 | $ | 49,515 | |||||||||||||
As of December 31, 2025, the undistributed earnings of foreign subsidiaries continue to be indefinitely reinvested, and deferred taxes have not been provided.
Unrecognized Tax Positions
The Company is subject to taxation in US, Canada, Mexico, India, and state jurisdictions. The Company’s tax returns are subject to examination by the applicable tax authorities prior to the expiration of statute of limitations for assessing additional taxes, which generally ranges from two to five years after the end of the applicable tax year. As of December 31, 2025, generally, tax years for 2019 through 2024 remain subject to examination by the tax authorities. In addition, in certain taxing jurisdictions, in the case of carryover tax attributes to years open for assessment, such attributes may be subject to reduction by taxing authorities.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Unrecognized tax benefits – January 1, | $ | 26,510 | $ | 43,134 | $ | 43,627 | |||||||||||
| Increases based on tax positions related to current period | 474 | — | — | ||||||||||||||
Decrease from expiration of statute of limitations(a) | (133) | (16,624) | (493) | ||||||||||||||
| Unrecognized tax benefits – December 31, | $ | 26,851 | $ | 26,510 | $ | 43,134 | |||||||||||
At December 31, 2025 there were $26.1 million of unrecognized tax benefits that, if recognized, would affect the annual effective tax rate.
The Company classifies interest on tax deficiencies and income tax penalties within income tax expense. During the years ended December 31, 2025, 2024, and 2023, the Company recognized approximately $0.5 million, $(0.2) million, and $0.0 million in interest, respectively. The Company accrued approximately $0.7 million and $0.2 million for the payment of interest at December 31, 2025 and 2024, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 20, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Mar 2, 2020 | |
| 2018 | Mar 15, 2019 | |
| 2017 | Mar 16, 2018 | |
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.