v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Holdings TRS and Observatory TRS are taxable entities and their consolidated provision for income taxes consisted of the following:
Year Ended December 31,
(amounts in thousands)202520242023
Current:
Federal$(1,016)$(1,044)$(783)
State and local(1,158)(1,368)(695)
Total current(2,174)(2,412)(1,478)
Deferred:
Federal(232)(297)(710)
State and local(152)21 (527)
Total deferred(384)(276)(1,237)
Income tax expense$(2,558)$(2,688)$(2,715)
As of December 31, 2025, ESRT had $103.0 million of NOL carryforwards that may be used in the future to reduce the amount otherwise required to be distributed by ESRT to meet REIT requirements. However, for federal income tax purposes, the NOL will not be able to offset more than 80% of ESRT’s REIT taxable income and may not be able to reduce the amount required to be distributed by ESRT to meet REIT requirements to zero. The federal NOL may be carried forward indefinitely. Other limitations may apply to ESRT’s ability to use its NOL to offset taxable income.
The effective income tax rate reconciliations are presented below:
Year Ended December 31,
2025
(amounts in thousands, except for percentage)AmountPercentage
U.S. federal statutory tax rate$(1,496)21.0 %
State and local income taxes, net of federal income tax effect(1)
(977)13.7 %
Nontaxable or nondeductible items and other adjustments(85)1.2 %
Effective tax rate(2)
$(2,558)35.9 %
(1) State and local taxes in New York made up the majority (greater than 50 percent) of the tax effect in this category.
(2) The effective income tax rate was 34.3% and 44.5% for the years ended December 31, 2024 and 2023, respectively.
The actual tax provision differed from that computed at the federal statutory corporate rate as follows:
Year Ended December 31,
(amounts in thousands)202520242023
Federal tax expense at statutory rate$(1,248)$(1,341)$(1,494)
State income tax expense, net of federal benefit(1,310)(1,347)(1,221)
Income tax expense$(2,558)$(2,688)$(2,715)
We measure deferred tax assets and liabilities using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid. As of December 31, 2025 and 2024 the Company had deferred tax assets of $0.9 million, which are included in prepaid expenses and other assets on the consolidated balance sheets. As of December 31, 2025 and 2024 the Company had deferred tax liabilities of $0.7 million and $0.4 million, respectively, which are included in deferred revenue and other liabilities on the consolidated balance sheets.
As of December 31, 2025, 2024 and 2023, the TRS entities have no amount of unrecognized tax benefits. As of December 31, 2025, the tax years ended December 31, 2022 through December 31, 2025 remain open for an audit by the Internal Revenue Service, state or local authorities.