Note 10 - Income Taxes

9 Months Ended

Sep. 30, 2026

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note 10. Income Taxes

During the three months ended September 30, 2026, net income attributable to Avalon Holdings Corporation shareholders was $2.7 million compared to net income attributable to Avalon Holdings Corporation shareholders of $1.9 million during the three months ending September 30, 2025. During the nine months ended September 30, 2026, net income attributable to Avalon Holdings Corporation shareholders was $2.3 million compared to a net income attributable to Avalon Holdings Corporation shareholders of $0.7 million during the nine months ended September 30, 2025. Avalon recorded a state income tax provision in both the three and nine month periods ended September 30, 2026 and 2025, which was related entirely to the waste management and brokerage operations. Due to the recording of a full valuation allowance against the Company’s federal and state net deferred tax assets, the overall effective tax rate in both periods reflects taxes owed in certain U.S state jurisdictions. A valuation allowance is provided when it is more likely than not that deferred tax assets relating to certain federal and state loss carryforwards will not be realized. Avalon continues to maintain a valuation allowance in amount of $3.6 million as of September 30, 2026 against the majority of its deferred tax assets, primarily related to U.S. federal and state operating loss carryforwards, tax credit carryforwards and disallowed business interest until it is evident that the deferred tax asset will be utilized in the future.