Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | NOTE 11 - INCOME TAXES The Company is a corporation and thus is subject to United States (“U.S.”) federal, state and local income taxes. Intuitive Machines, LLC is a partnership for U.S. federal income tax purposes and therefore does not pay U.S. federal income tax on its taxable income. Instead, the Intuitive Machines, LLC unitholders, including the Company, are liable for U.S. federal income tax on their respective shares of Intuitive Machines, LLC’s taxable income. Intuitive Machines, LLC is liable for income taxes in those states which tax entities classified as partnerships for U.S. federal income tax purposes. For the three and six months ended June 30, 2026, we recognized U.S. federal and state income tax expense of $8 thousand and $10 thousand, respectively. For the corresponding periods in 2025, we recognized no U.S. federal and state expense for income taxes. Our effective combined U.S. federal and state income tax rate was 0.01% for the three and six months ended June 30, 2026 and 0.00% for the corresponding periods ended June 30, 2025. In conjunction with the consummation of the Transactions, Intuitive Machines, Inc. entered into a tax receivable agreement (the “TRA”). Pursuant to the TRA, the Company is required to pay the TRA Holders (certain Intuitive Machines, LLC members and related parties to the Company) 85% of the amount of the cash tax savings, if any, in U.S. federal, state, and local taxes that are based on, or measured with respect to, net income or profits, and any interest related thereto that the Company realizes, or is deemed to realize, as a result of certain tax attributes, including: •existing tax basis in certain assets of Intuitive Machines, LLC and its subsidiaries; •tax basis adjustments resulting from taxable exchanges of Intuitive Machines, LLC Common Units acquired by the Company; •certain tax benefits realized by the Company as a result of the Business Combination; and •tax deductions in respect of portions of certain payments made under the TRA. All such payments to the TRA Holders are the obligations of the Company, and not that of Intuitive Machines, LLC. As of June 30, 2026, based primarily on historical losses of the Company, management has determined it is more-likely-than-not that the Company will be unable to utilize its deferred tax assets subject to the TRA; therefore, management applies a full valuation allowance to deferred tax asset for a corresponding liability under the TRA related to the tax savings the Company may realize from the utilization of tax deductions related to basis adjustments created by the transactions in the Business Combination Agreement. As of June 30, 2026, management does not expect a TRA liability to be recorded. On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act ("OBBBA"). The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. ASC 740, “Income Taxes”, requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. We have assessed the impact of the OBBBA and determined that the impact on our condensed consolidated financial statements is not material.
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