Company: NGVC
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001437749-25-025419
Chunk: 25

Company: Natural Grocers by Vitamin Cottage, Inc.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 8
Chunk 25
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12. Income Taxes

Income taxes are accounted for in accordance with the provisions of FASB ASC Topic 740 “Income Taxes” (ASC 740). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are remeasured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized.

On July 4, 2025, the U.S. federal government enacted the One Big Beautiful Bill Act (OBBBA). The OBBBA, among other things, makes changes to certain business-related exclusions, deductions and credits. As the effects of changes in tax law are recognized in the period of change, this legislation is not reflected in the Company’s unaudited consolidated financial statements for the periods ended June 30, 2025. The Company is currently evaluating the impact of the OBBBA, but does not expect it to have a material impact on its consolidated financial statements.

13. Related Party Transactions

The Company has ongoing relationships with related entities as noted below:

Chalet Properties, LLC: The Company has five operating leases (see Note 7) with Chalet. Chalet is owned by the Company’s four non-independent Board members: Kemper Isely, Zephyr Isely, Heather Isely and Elizabeth Isely, and other related family members. Rent paid to Chalet was $0.2 million for each of the three months ended June 30, 2025 and 2024, and $0.6 million for each of the nine months ended June 30, 2025 and 2024.

Isely Family Land Trust LLC: The Company has one operating lease (see Note 7) with the Land Trust. The Land Trust is owned by the Isely Children’s Trust and by the Margaret A. Isely Family Trust. Rent paid to the Land Trust was $0.1 million for each of the three months ended June 30, 2025 and 2024 and was $0.2 million for each of the nine months ended June 30, 2025 and 202