v3.26.1
Income Tax
 6 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
Income Tax INCOME TAX
An estimate of annual income tax expense is made each interim period using estimates for annual pre-tax income, regulatory flow-through adjustments, tax credits, and other items. The estimated annual effective tax rate is applied to year-to-date, pre-tax income to determine income tax expense for the interim period consistent with the annual estimate. Discrete events are recorded in the interim period in which they occur or become known.

The effective income tax rate varied from the federal statutory rate due to the following:
Three Months Ended June 30,
NW HoldingsNW Natural
In thousands2026202520262025
Income tax at statutory rate (federal)$254 $(722)$1,294 $1,378 
State income tax101 (210)649 306 
Increase (decrease):
Differences required to be flowed-through by regulatory commissions6 8 7 9 
Other, net249 (16)281 (55)
Total expense (benefit) for income taxes$610 $(940)$2,231 $1,638 
Effective income tax rate50.5 %27.3 %36.2 %25.0 %
Six Months Ended June 30,
NW HoldingsNW Natural
In thousands2026202520262025
Income tax at statutory rate (federal)$27,560 $24,991 $27,734 $27,986 
State income tax8,931 9,770 9,896 10,508 
Increase (decrease):
Differences required to be flowed-through by regulatory commissions(1,948)(1,660)(1,947)(1,659)
Other, net(1,394)486 (1,297)467 
Total provision for income taxes$33,149 $33,587 $34,386 $37,302 
Effective income tax rate25.3 %28.2 %26.0 %28.0 %

The NW Holdings effective income tax rate for the six months ended June 30, 2026 compared to the same period in 2025, decreased due to lower state income tax rates in the SiEnergy and NWN Water segments. In addition, both NW Holdings and NW Natural effective tax rates benefited from lower non-deductible executive compensation expense and higher AFUDC equity income. Interim effective tax rates may fluctuate from quarter to quarter, particularly when pre-tax income is relatively low. As a result, a quarterly effective tax rate may not be indicative of year-to-date effective tax rates. For further detail on income taxes and effective tax rates, refer to Note 11 in the 2025 Form 10-K.

The IRS Compliance Assurance Process (CAP) examination of the 2024 tax year was completed during the first quarter of 2026. There were no material changes to the return as filed. The 2025 and 2026 tax years are subject to examination under CAP.