Company: BWMN
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001628280-25-012365
Chunk: 127

Company: Bowman Consulting Group Ltd.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 1A
Chunk 127
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. Our continuing work in the areas governed by these laws and regulations exposes us to the risk of substantial liability. 

While our business is not subject to significant regulation, the services we provide to our customers address various federal, state and local regulations that must be complied with to receive approval to proceed. In connection with the process of bidding for and being awarded certain government assignments we are required to provide an annual Federal Acquisition Regulation rate audit that determines our overhead reimbursement allowance. With respect to the operation of our business, we are subject to professional licensing requirements that vary by state. 

Each state establishes licensing and organizational requirements for our services. Certain states allow only individuals and individually owned professional services corporations to hold licenses. In those states there may be grandfathering exemptions that allow corporations to hold licenses. In the event a state does not allow a corporation to hold a license, we have in the past formed professional services corporations owned by Mr. Bowman and other employees to facilitate our ability to work in such states. To the extent we cannot adequately satisfy a state’s licensing requirements, we 

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do not operate in that state. As of December 31, 2024, we were licensed to operate in all states within the United States either directly or through an affiliate. 

Changes in tax laws could increase our tax rate and tax payments and materially affect our results of operations.

We are subject to tax laws in the United States and various states. The current U.S. presidential administration has called for fiscal and tax policies, which may include extension of the 2017 Tax Cut & Jobs Act as well as other aspects of tax reform. Some of these proposed changes to the taxation of our activities could increase our effective tax rate and harm our results of operations. Further, as part of the recently adopted Inflation Reduction Act of 2022, the United States implemented a 1% excise tax on the value of certain share repurchases by publicly traded companies and this excise tax rate could plausibly increase through additional legislation. As discussed below, this tax could increase the costs to us of any share repurchases. In addition, under the 2017 Tax Cut & Jobs Act, research and experimental costs are no longer fully deductible and are required to be capitalized and amortized for U.S. tax purposes effective for our fiscal year ended December 31, 2024. Unless this provision of the act is repealed or its effectiveness is deferred, the capitalization requirement would significantly increase our tax payments. 

Risks Relating to Our Common Stock