Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Income Taxes [Abstract] | |
| Income Taxes | Note 16 – Income Taxes
The Company’s effective tax rate was an expense of 3.1% and 2.9% for the three and six months ended June 30, 2026, respectively. The Company’s effective tax rate was an expense of 4.1% and a benefit of 4.3% for the three and six months ended June 30, 2025, respectively. The decrease in income tax expense in the second quarter of 2026 is primarily attributed to the decrease in earnings and state jurisdictional mix. The increase in the income tax expense for the first half of 2026 is primarily attributed to last year’s release of $22,575 of income tax reserve regulatory liability in the Regulated Water segment based on the rate order received by Aqua Pennsylvania in February 2025, not recurring in the current year.In determining its interim tax provision, the Company reflects its estimated impact from its permanent and flow-through tax differences. The Company uses the flow-through method to account for the repairs tax deduction for qualifying utility infrastructure at its regulated Pennsylvania and New Jersey subsidiaries.
The statutory Federal tax rate is 21.0% for the six months ended June 30, 2026 and 2025. For states with a corporate net income tax, the state corporate net income tax rates range from 2.0% to 9.50% for all periods presented. Our effective tax rate differs from the federal statutory tax rate primarily due to flow-through tax, the amortization of deferred benefit from repair method changes, state income taxes, and other permanent book-to-tax differences.
On July 4, 2025, H.R.1 – One Big Beautiful Bill Act (“OBBBA”) was enacted into law. The OBBBA includes significant provisions such as the permanent extension of certain expiring provisions of the 2017 Tax Cuts and Jobs Act. The OBBBA did not have a significant impact to our consolidated financial statements. |