Company: ONEW
Filing Date: 2025-01-31
Form Type: 10-Q
Source: 0001772921-25-000013
Chunk: 36

Company: OneWater Marine Inc.
Filing Date: 2025-01-31
Form: 10-Q
Item: Part I, Item 1
Chunk 36
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 new boat cost of sales in the unaudited consolidated statement of operations. Of the $1.9 million restructuring charges, $1.2 million and $0.7 million is reported in the Dealerships and Distribution reporting segments, respectively. No restructuring and impairment charges were recorded for the three months ended December 31, 2023.

14.    Income Taxes

The Company is a corporation and, as a result, is subject to U.S. federal, state and local income taxes. OneWater LLC is treated as a pass-through entity for U.S. federal tax purposes and in most state and local jurisdictions. As such, OneWater LLC’s members, including the Company, are liable for federal and state income taxes on their respective shares of OneWater LLC’s taxable income.Our effective tax rates of 27.9% and 22.2% for the three months ending December 31, 2024 and 2023, respectively, differ from statutory rates primarily due to losses allocated to non-controlling interests and limitations on officer's compensation.The Company had federal net operating loss carryforwards from underlying corporate entities of approximately $4.3 million resulting in a deferred tax asset of $0.9 million as of September 30, 2024. The U.S. federal net operating loss carryforwards have no expiration but can only be used to offset up to 80% of future taxable income annually. The Company has Alabama net operating loss carryforwards of $0.3 million which has no limitation in use and expire in the years 2037 to 2040. The Company projects to fully utilize the net operating losses in subsequent fiscal years.The Company has an IRC Section 163(j) interest expense carryforward of approximately $3.7 million, resulting in a deferred tax asset of $0.9 million as of September 30, 2024. The IRC Section 163(j) interest expense carryforward has no expiration.The Company recognizes deferred tax assets to the extent it believes these assets are more-likely-than-not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing temporary differences, projected future taxable income, tax planning strategies and recent results of operations. Based on our cumulative earnings history and forecasted future sources of taxable income, we believe that we will fully realize our deferred tax assets in the future. The Company has not recorded a valuation allowance.As of December 31, 2024 and September