Income Taxes

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Income TaxesIncome Taxes

Income Tax Expense

The components of income tax expense were as follows:

	Years Ended December 31,
(in thousands)	2025		2024
Current income tax expense
Federal	$	820	$	460
State	148		140
Total current	968		600
Deferred income tax expense
Federal	45		1,294
State	13		179
Total deferred	58		1,473
Income tax expense	$	1,026	$	2,073

Statutory Rate Reconciliation

The following table represents a reconciliation of income tax expense at the statutory federal income tax rate to the actual income tax expense from continuing operations:

	For the Years Ended December 31,
(in thousands)	2025				2024
Book income before taxes	$	3,983			$	7,862
Computed federal tax expense at statutory rate	836		21.0	%	1,651		21.0	%
State income taxes - net of federal tax benefit	158		4.0	%	318		4.0	%
Nontaxable or nondeductible items
Tax regulatory asset amortization	37		0.9	%	37		0.5	%
Other	18		0.5	%	10		0.1	%
Other differences	(23)		(0.6)	%	57		0.8	%
Income tax expense	$	1,026	25.8	%	$	2,073	26.4	%

All of the Company’s income before income taxes and income tax expense for the years ended December 31, 2025 and 2024 were attributable to domestic operations. The Company had no foreign income or income tax expense during these periods. Further, the Company operates solely in the state of Arizona, therefore all state income tax expense pertains to Arizona.

Components of Net Deferred Income Tax Liability

The following table summarizes the Company’s temporary differences between book and tax accounting that give rise to the deferred tax assets and deferred tax liabilities:

(in thousands)	December 31, 2025		December 31, 2024
Deferred tax assets
Deferred gain on ICFA funds received	$	5,664	$	5,352
AIAC	4,248		4,248
Balterra intangible asset acquisition	224		224
Other	2,247		1,353
Total deferred tax assets	12,383		11,177
Deferred tax liabilities
Utility plant	(18,720)		(17,983)
Regulatory liability	(199)		(214)
CP Water intangible asset acquisition	(381)		(381)
ICFA intangible asset	(452)		(452)
Gain on condemnation of Valencia	(140)		(184)
Other Liabilities	(2,190)		(1,661)
Total deferred tax liabilities	(22,082)		(20,875)
Net deferred tax liability	$	(9,699)	$	(9,698)

As of December 31, 2025, the Company has no net operating loss carry forwards and no uncertain tax positions.

Cash Paid For Taxes

Income taxes paid, net of refunds received were as follows:

(in thousands)	Years Ended December 31,
	2025		2024
Cash paid for income taxes
Federal	$	1,542	$	107
State	190		—
Total taxes paid, net of refunds	$	1,732	$	107