Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Schedule of Components of Income Before Income Taxes

The components of income before income taxes are as follows (in thousands):


	Year Ended December 31,
	2023		2022		2021
Domestic	$	54,935	$	152,000	$	4,030
Foreign	—		—		—
Income before income taxes	$	54,935	$	152,000	$	4,030

Schedule of Components of Income Tax Expense

The components of income tax expense are as follows (in thousands):


	Year Ended December 31,
	2023		2022		2021
Current income taxes:
Federal	$	—	$	—	$	—
State	915		554		631
Foreign	—		—		—
Total current income taxes	915		554		631
Deferred income taxes:
Federal	10,146		13,639		397
State	1,188		(5,233)		(1,873)
Foreign	—		—		—
Total deferred income taxes	11,334		8,406		(1,476)
Other tax expense	25		27		931
Income tax expense	$	12,274	$	8,987	$	86

Schedule of U.S Federal Statutory Income Tax Rate and the Reported Income Tax (Benefit) Expense

The differences between income taxes expected at the U.S. federal statutory income tax rate and the reported income tax expense are summarized as follows (in thousands):


	Year Ended December 31,
	2023		2022		2021
U.S. federal income taxes at statutory rate	$	11,537	$	31,920	$	846
State and local income tax, net of federal benefit	1,811		4,786		(1,380)
Permanent tax adjustments	101		(6)		356
Equity-based compensation	447		685		(14)
Non-deductible officers' compensation	968		397		—
Pre-IPO income	—		—		(562)
Non-controlling interests	(564)		(3,289)		(342)
Termination of TRA	—		(15,905)		349
Termination of Up-C structure	(2,347)		—		—
Remeasurement of deferred taxes	—		(6,775)		(1,939)
Change in valuation allowance	988		(1,983)		1,983
Other	(667)		(843)		789
Income tax expense	$	12,274	$	8,987	$	86

Schedule of Deferred Tax Assets and Liabilities

The components of the deferred tax assets and liabilities are as follows (in thousands):


	Year Ended December 31,
	2023		2022
Deferred tax assets:
Investment in Shoals Parent	$	—	$	284,729
Inventory, net	1,677		—
Property, plant & equipment, net	709		—
Goodwill	450,830		—
Accrued expenses and other	2,310		—
Warranty liability	12,824		—
Net operating loss	5,380		4,626
Equity-based compensation	2,869		2,030
Other	4,090		249
Total deferred tax assets	480,689		291,634
Less valuation allowance	(988)		—
Total deferred tax assets, net	479,701		291,634
Deferred tax liabilities:
Other intangible assets, net	(10,636)		—
Other	(870)		—
Total deferred tax liabilities	(11,506)		—
Net deferred tax asset	$	468,195	$	291,634