The provision for income taxes for fiscal years 2025, 2024, and 2023 consists of the following (amounts in thousands):

The tax effects of significant temporary differences representing deferred tax assets and liabilities are as follows (amounts in thousands):

The net deferred tax liability is reported on the accompanying Consolidated Balance Sheets based on net position by tax jurisdiction, within federal positions of approximately $4.0 million recorded as assets on the Consolidated Balance Sheets within “Other assets” and state positions of $4.1 million recorded as liabilities on the accompanying Consolidated Balance Sheets at January 31, 2026. At January 31, 2025, both federal positions and state positions were recorded as net liabilities with “Deferred taxes” on the Consolidated Balance Sheets.

On July 4, 2025, the OBBBA was signed into law. The OBBBA contains various tax reform provisions affecting businesses, such as the extension of bonus depreciation for assets placed in service after January 19, 2025 and immediate expensing of domestic research and development costs, to result in current deductions that will lower cash paid for income taxes for 2025. The OBBBA made changes to the 45Z and 45Q tax credits that the Company intends to take advantage of which materially impact our effective tax rate. The Section 45Z clean fuel production credit is a general business credit that is allowed with respect to clean transportation fuel produced domestically after December 31, 2024, and before December 31, 2029. This credit, which was part of the IRA, and subsequently extended by the OBBBA, incentivizes the production of clean fuels at our plants that reduce GHG emissions below a CI score of 50. The tax credit utilizes a sliding scale where credits can be earned incrementally between $0.02 and $0.20, or $0.10 and $1.00 if prevailing wage and apprenticeship requirements are met, per gallon of non-SAF fuels based on an ethanol plant’s GHG reduction below a 50 CI score threshold, with the first two or ten cents earned upon achieving a CI score below 47.5. The company expects that it is more-likely-than-not that prevailing wage and apprenticeship requirements will be met for 2025 for its consolidated ethanol plants and has calculated the credit at the highest credit rate based on its CI score for 2025, after the purchase of EACs.

The Company has a general business credit carryforward, net of the impact of uncertain tax positions, of approximately $24.7 million and $4.2 million at January 31, 2026 and 2025, respectively. The credits at January 31, 2025 were fully utilized as part of the effective settlement of the IRS audit that is in process of being finalized. The Company earned 45Z clean fuel production credits in 2025 that make up the $24.7 million of credits to be carried forward at January 31, 2026. The Company can carry these credits forward for up to twenty-two years. The carryforward periods expire in fiscal year 2047.

The Company has a valuation allowance of approximately $64,000 and $132,000 at January 31, 2026 and 2025, respectively, related to state net operating loss carryforwards. The Company decreased the valuation allowance by $68,000 in fiscal year 2025. These adjustments to the valuation allowance are a result of estimates of realizing certain future state tax benefits.

The Company assessed all available positive and negative evidence to determine whether it expects sufficient future taxable income will be generated to allow for the realization of existing federal deferred tax assets. There is sufficient objectively verifiable income for management to conclude that it is more likely than not that the Company will utilize available federal deferred tax assets prior to their expiration.

During fiscal year 2025, the Company recognized an income tax benefit for federal 45Z clean fuel production credits of approximately $28.1 million. The credits can be used to reduce future income tax liabilities for up to 22 years.

The Company paid income taxes in fiscal years 2025, 2024, 2023 of the following (amounts in thousands):

The Company received no refunds in fiscal years 2025, 2024, and 2023.

Income taxes paid (net of refunds) exceeded 5 percent of total income taxes paid (net of refunds) in the following state jurisdictions in fiscal years 2025, 2024 and 2023 (amounts in thousands):

Reconciliations of the federal statutory tax and the Company’s income tax (benefit) provision for fiscal years 2025, 2024, and 2023 are as follows (amounts in thousands):

The Company files a U.S. federal income tax return and income tax returns in various states. In general, the Company is no longer subject to U.S. federal, state or local income tax examinations by tax authorities for fiscal years ended January 31, 2014 and prior. The Company is currently finalizing, as a settlement agreement has been reached, a federal income tax examination for the years ended January 31, 2015 through January 31, 2022 related to tax credits claimed on returns during those years.

The Company applies the provisions of ASC 740-10-25-5 for uncertain tax positions. Tax positions held at January 31, 2025 related to the research and experimentation credits that are under IRS audit have been considered effectively settled as of January 31, 2026. The Company has reached a settlement with the IRS and is in process of finalizing the audit. As of January 31, 2026, total unrecognized tax benefits were approximately $259,000, and accrued penalties and interest were approximately $124,000. If the Company were to prevail on all unrecognized tax benefits recorded, the provision for income taxes would be reduced by approximately $178,000. In addition, the impact of penalties and interest would also benefit the effective tax rate. Interest and penalties associated with unrecognized tax benefits are recorded within income tax expense.

On a quarterly and annual basis, the Company accrues for the effects of open uncertain tax positions and the related potential penalties and interest. It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain unrecognized tax positions will increase or decrease during the next 12 months; however, the Company does not expect the change to have a material effect on results of operations or financial position. The Company accounts for uncertainty in income taxes by determining whether it is more likely than not the position will be sustained on audit, including resolution of any related tax audits.

A reconciliation of the beginning and ending amount of unrecognized tax benefits, including interest and penalties, is as follows (amounts in thousands):

At January 31, 2026 and 2025, the total unrecognized tax benefits were included within the following lines on the accompanying Consolidated Balance Sheets (amounts in thousands):