Company: ATLCL
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0001437749-25-033947
Chunk: 11

Company: Atlanticus Holdings Corp
Filing Date: 2025-11-10
Form: 10-Q
Item: Item 8
Chunk 11
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 by customers will eventually be redeemed.
    
   Income Taxes
    
   We experienced effective tax rates of 24.0% and 24.0% for the three and nine months ended  September 30, 2025, respectively, compared to 21.5% and 19.7% for the three and nine months ended  September 30, 2024, respectively.
    
   Our effective tax rates for the three and nine months ended  September 30, 2025, are above the statutory rate principally due to our (1) state and foreign income tax expense, including the effects of law changes enacted in the nine months ended  September 30, 2025, in certain states in which we operate, (2) the tax effects of deduction disallowance under Section 162(m) of the Internal Revenue Code of 1986 as amended (the “Code”) with respect to compensation paid to our covered employees, and (3) taxes on global intangible low-taxed income. Offsetting the foregoing items were the tax effects of deductions (1) associated with the exercises of stock options and the vesting of restricted stock at the times when the fair value of our stock exceeded such share-based awards’ grant date values, and (2) of amounts characterized in our condensed consolidated financial statements as dividends on preferred stock (which was outstanding until its redemption in the first quarter of 2025), such amounts which constituted deductible interest expense on debt for tax purposes.
    
   Our effective tax rates for the three and nine months ended  September 30, 2024, are below the statutory rate principally due to the tax effects of our deduction of (1) amounts characterized in our condensed consolidated financial statements as dividends on preferred stock (which was outstanding at varying amounts in 2024), such amounts which constituted deductible interest expense on debt for tax purposes, and (2) exercises of stock options and the vesting of restricted stock at times when the fair value of our stock exceeded such share-based awards’ grant date values. Offsetting the foregoing items were (1) state and foreign income tax expense including the effects of law changes enacted in certain states in which we operate, (2) the tax effects of deduction disallowance under Section 162(m) of the Code with respect to compensation paid to our covered employees and (3) taxes on global intangible low-taxed income.

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   We report interest expense associated with our income tax liabilities (including accrued liabilities for uncertain