v3.24.2.u1
Income Tax
 6 Months Ended
Jun. 30, 2024
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 thousands2024202320242023
Income tax at statutory rate (federal)$(756)$312 $(80)$442 
State income tax(345)211 (167)217 
Increase (decrease):
Differences required to be flowed-through by regulatory commissions107 (161)108 (160)
Other, net182 (119)183 (177)
Total (benefit) expense for income taxes$(812)$243 $44 $322 
Effective income tax rate22.6 %16.3 %(11.6)%15.3 %

Six Months Ended June 30,
NW HoldingsNW Natural
In thousands2024202320242023
Income tax at statutory rate (federal)$17,758 $20,644 $19,499 $21,854 
State income tax7,232 8,360 7,682 8,623 
Increase (decrease): 
Differences required to be flowed-through by regulatory commissions(1,472)(3,070)(1,472)(3,069)
Other, net9 (544)8 (664)
Total provision for income taxes$23,527 $25,390 $25,717 $26,744 
Effective income tax rate27.8 %25.8 %27.7 %25.7 %
The NW Holdings and NW Natural effective income tax rates for the six months ended June 30, 2024 compared to the same period in 2023 changed primarily as a result of lower regulatory flow-through. The income tax benefit resulting from applying a lower U.S. corporate income tax rate to gas reserves investments, that originally occurred in 2017 as a result of the TCJA, was completely amortized to the benefit of customers in 2023. See Note 11 in the 2023 Form 10-K for more detail on income taxes and effective tax rates.

The IRS Compliance Assurance Process (CAP) examination of the 2022 tax year was completed during the first quarter of 2024. There were no material changes to the return as filed. The 2023 and 2024 tax years are subject to examination under CAP.