Company: EAI
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0000065984-25-000132
Chunk: 264

Company: ENTERGY ARKANSAS, LLC
Filing Date: 2025-10-31
Form: 10-Q
Item: Item 7
Chunk 264
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 statements in the Form 10-K for discussion of the group annuity contract and settlement charge.

Income Taxes

The effective income tax rate was 22.5% for the nine months ended September 30, 2025.  The difference in the effective income tax rate for the nine months ended September 30, 2025 versus the federal statutory rate of 21% was primarily due to the accrual for state income taxes, partially offset by book and tax differences related to the allowance for equity funds used during construction and certain book and tax differences related to utility plant items.

The effective income tax rate was 25.9% for the nine months ended September 30, 2024.  The difference in the effective income tax rate for the nine months ended September 30, 2024 versus the federal statutory rate of 21% was primarily due to the accrual for state income taxes, amortization of accumulated deferred income taxes as a result of tax rate changes, and a provision for uncertain tax positions, partially offset by the resolution of an Arkansas state income tax audit, certain book and tax differences related to utility plant items, and book and tax differences related to the allowance for equity funds used during construction.  See Note 3 to the financial statements in the Form 10-K for discussion of the Arkansas state income tax audit.

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Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysis

Income Tax Legislation and Regulation

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Income Tax Legislation and Regulation” in the Form 10-K for discussion of income tax legislation and regulation.  The following is an update to that discussion.  See Note 10 to the financial statements herein for discussion of the nuclear and solar production tax credits recorded in 2025.

One Big Beautiful Bill Act of 2025

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted.  The OBBBA is a wide ranging update to U.S. tax and spending policy.  In particular, the OBBBA modified and extended various clean energy tax incentives relevant to electric utilities, preserving production tax credits under Internal Revenue Code section 45U for existing nuclear facilities through 2032 and generally maintaining the existing phase-out schedule for new nuclear and battery storage under Internal Revenue Code sections 45Y (clean electricity production credit) or Internal Revenue Code section 48E (clean electricity investment credit).  In addition, the OBBBA