Company: DXPE
Filing Date: 2025-03-10
Form Type: 10-K
Source: 0001020710-25-000036
Chunk: 29

Company: DXP ENTERPRISES INC
Filing Date: 2025-03-10
Form: 10-K
Item: Item 7A
Chunk 29
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 taxing jurisdictions. If the Company was to determine that it would be able to realize the deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the valuation allowance, which would reduce the provision for income taxes. As of December 31, 2024, the valuation allowance primarily relates to state operating loss and foreign capital loss carryforwards. The following summarizes changes in the balance of valuation allowances on deferred tax assets (in thousands):  202420232022Balance at January 1$(278)$(4)$(4)Changes due to state operating loss and foreign capital loss carryforwards57 (274)— Balance at December 31$(221)$(278)$(4)Expected tax benefit on carryforwards available for use on future income tax returns, prior to valuation allowance, at December 31, 2024, are as follows (in thousands):   Domestic  ForeignExpirationNet operating loss - foreign$— $562 2034-2043Net operating loss - federal (100%)32 — 2037Net operating loss - federal (80%)447 — IndefiniteNet operating loss - state217 — IndefiniteCapital loss carryforward - foreign— 4 IndefiniteForeign tax credits64 — 2025Texas research and development tax credits2,232 — 2037-2043Louisiana research and development tax credits$10 $— 2025-2027Changes in the balance of unrecognized tax benefits excluding interest and penalties on uncertain tax positions are as follows (in thousands):  Assets (Liabilities)  202420232022Balance at January 1,$(5,755)$(5,918)$(6,316)   Decreases related to prior year tax positions142 1,475 614    Increases related to current year tax positions(3,089)(1,312)(216)Balance at December 31,$(8,702)$(5,755)$(5,918)As of December 31, 2024, the Company had recorded a total tax benefit of $35.6 million related to federal and state research and development tax credits. This benefit is partially offset by $8.5 million uncertain tax position due to the uncertainty related to the realizability of the federal research and development tax credits. The Company is also recording a $0.2 million uncertain tax position related to non-deductible auto expense