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INCOME TAXES
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Altice USA files a federal consolidated and certain state combined income tax returns with its 80% or more owned subsidiaries. CSC Holdings and its subsidiaries are included in the consolidated federal income tax returns of Altice USA. The income tax provision for CSC Holdings is determined on a stand-alone basis for all periods presented as if CSC Holdings filed separate consolidated income tax returns. In accordance with a tax sharing agreement between CSC Holdings and Altice USA, CSC Holdings has an obligation to Altice USA for its stand-alone current tax liability as if it filed separate income tax returns.
Income tax expense for the years ended December 31, 2024, 2023 and 2022 consist of the following components:
Altice USACSC Holdings
Years Ended December 31,Years Ended December 31,
 202420232022202420232022
Current expense (benefit):
Federal$312,330 $227,189 $133,329 $311,628 $227,189 $133,329 
State6,626 54,130 81,076 6,626 62,312 88,068 
Foreign— 105 128 — 105 128 
 318,956 281,424 214,533 318,254 289,606 221,525 
Deferred expense (benefit):
Federal(321,244)(210,378)(43,797)(321,245)(210,378)(43,797)
State(74,872)(16,547)80,356 (78,370)(21,680)69,676 
Foreign64 10 (174)64 10 (174)
 (396,052)(226,915)36,385 (399,551)(232,048)25,705 
(77,096)54,509 250,918 (81,297)57,558 247,230 
Tax expense (benefit) relating to uncertain tax positions73,025 (14,981)44,922 73,025 (14,981)44,922 
Income tax expense (benefit)$(4,071)$39,528 $295,840 $(8,272)$42,577 $292,152 
The income tax expense (benefit) attributable to operations differs from the amount derived by applying the statutory federal rate to pretax income (loss) principally due to the effect of the following items:
Altice USACSC Holdings
Years Ended December 31,Years Ended December 31,
202420232022202420232022
Federal tax expense (benefit) at statutory rate$(17,293)$24,899 $108,513 $(17,995)$24,899 $108,513 
State income taxes, net of federal impact(66,814)6,436 26,527 (72,536)9,842 28,768 
Minority interest(5,662)(5,494)(5,914)(5,662)(5,494)(5,914)
Changes in the valuation allowance5,598 13,847 20,176 7,821 14,099 15,494 
Change in New York state rate to measure deferred taxes, net of federal impact— — 112,117 — — 112,117 
Other changes in the state rates used to measure deferred taxes, net of federal impact(5,350)23,909 (9,603)(5,350)23,300 (10,849)
Tax expense (benefit) relating to uncertain tax positions63,941 (14,311)36,281 63,941 (14,311)36,281 
Tax credits(3,987)(4,201)(3,544)(3,987)(4,201)(3,544)
Excess tax deficiencies related to share-based compensation including non-deductible carried unit plans12,353 11,696 10,321 12,353 11,696 10,321 
Non-deductible officers compensation3,027 3,934 4,916 3,027 3,934 4,916 
Foreign losses of disregarded entities(8,361)(6,097)(6,352)(8,361)(6,097)(6,352)
Business dispositions— (46,591)— — (46,591)— 
Goodwill impairment and other permanent differences 16,887 34,241 — 16,887 34,241 — 
Other, net1,590 (2,740)2,402 1,590 (2,740)2,401 
Income tax expense (benefit)$(4,071)$39,528 $295,840 $(8,272)$42,577 $292,152 
We have decided to exit the commitment we made in May 2021 of investing $600,000 in capital gains generated from the 49.99% sale of Lightpath in 2020, into Qualified Opportunity Zones (“QOZ”) over the next 5 years, which allowed for tax deferral recognition until 2026. The tax expense impact of this exit is approximately $1,269 for the year ended December 31, 2024.
Also during 2024, we increased our unrecognized tax benefit (“UTB”) reserve liability for tax years 2023 and 2024 relating to the qualified emerging technology company (“QETC”) position taken in 2022 described below, as well as for the state impact on the QOZ exit discussed above.
Due to the sale of our Cheddar News business in December 2023 to an unrelated third party, we recognized a capital loss resulting in an income tax benefit for the year ended December 31, 2023. In addition, our income tax expense for the year ended December 31, 2023 was impacted by the non-deductibility of the impairment of goodwill related to our News and Advertising business (see Note 10).
In December 2022, the New York State Division of Tax Appeals, via an Administrative Law Judge determination, published a decision in Charter Communications, Inc. versus New York State, which concluded that each corporation in a combined reporting group would have to separately qualify as a QETC to use the preferential QETC tax rate. As we had been historically using the QETC rate at the combined reporting group level, we recorded a cumulative income tax expense of $157,300 that included both a revaluation of state deferred taxes and an increase to our uncertain tax positions reserve for tax years 2017 through 2022 based on this published decision.
The tax effects of temporary differences which give rise to significant portions of deferred tax assets or liabilities and the corresponding valuation allowance are as follows:
Altice USACSC Holdings
 December 31,December 31,
 2024202320242023
Noncurrent
NOLs, capital loss, and tax credit carry forwards (a)$129,444 $130,134 $109,103 $104,071 
Compensation and benefit plans61,486 90,853 61,486 90,853 
Restructuring liability2,349 7,220 2,349 7,220 
Other liabilities21,482 50,440 21,482 50,440 
Research and experimental expenditures40,872 33,427 40,872 33,427 
Interest deferred for tax purposes781,826 536,284 781,826 536,284 
Investments1,516 1,519 1,516 1,519 
Operating lease liability74,773 79,263 74,773 79,263 
Deferred tax assets1,113,748 929,140 1,093,407 903,077 
Less: Valuation allowance(93,005)(87,407)(72,664)(64,844)
Net deferred tax assets, noncurrent1,020,743 841,733 1,020,743 838,233 
Deferred tax liabilities:
Fixed assets and intangibles(5,208,559)(5,250,112)(5,208,559)(5,250,112)
Operating lease asset(61,014)(64,163)(61,014)(64,163)
Partnership investments(185,473)(173,198)(185,473)(173,198)
Prepaid expenses(11,513)(14,630)(11,513)(14,630)
Derivative contracts(9,745)(40,357)(9,745)(40,357)
Fair value adjustments related to debt and deferred financing costs
— (1,751)— (1,751)
Opportunity Zone tax deferral— (145,655)— (145,655)
Deferred tax liability, noncurrent(5,476,304)(5,689,866)(5,476,304)(5,689,866)
Total net deferred tax liabilities$(4,455,561)$(4,848,133)$(4,455,561)$(4,851,633)
(a)Includes deferred tax assets of $279 and $326 as of December 31, 2024 and 2023, respectively, that relate to the net operating losses of foreign subsidiaries which are presented under Other assets on the consolidated balance sheets.
Due to the exit of the QOZ commitment in 2024 discussed above, taxes payable (recorded in other current liabilities) and the UTB reserve increased by $93,624 and $12,920, respectively, while the deferred tax liability decreased by $105,278, on our consolidated balance sheet at December 31, 2024.
In the fourth quarter of 2024, we carried back the net capital loss of $98,207 due to the sale of the Cheddar News business in December 2023 against the taxable capital gain generated in connection with the 49.99% sale of Lightpath in 2020.
Deferred tax assets have resulted primarily from our future deductible temporary differences and NOLs. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax asset will not be realized. In evaluating the need for a valuation allowance, management takes into account various factors, including the expected level of future taxable income, available tax planning strategies and reversals of existing taxable temporary differences. If such estimates and related assumptions change in the future, we may be required to record additional valuation allowances against its deferred tax assets, resulting in additional income tax expense in our consolidated statements of operations. Management evaluates the realizability of the deferred tax assets and the need for additional valuation allowances quarterly. Due to the significant deferred tax liabilities associated with our fixed assets and intangibles, primarily due to the change in the 2017 TCJA, allowing 100% bonus depreciation on most fixed assets (this percentage decreased to 60% for 2024), as well as the continued
taxable income adjustments associated with the deferred tax liabilities established under purchase accounting pursuant to the Cablevision and Cequel acquisitions in 2016, the future taxable income that will result from the reversal of existing taxable temporary differences for which deferred tax liabilities are recognized is sufficient to conclude it is more likely than not that we will realize all of its gross deferred tax assets, except those deferred tax assets against which a valuation allowance has been recorded which relate to certain state NOLs and the foreign NOLs in i24NEWS.
In the normal course of business, we engage in transactions in which the income tax consequences may be uncertain. Our income tax returns are filed based on interpretation of tax laws and regulations. Such income tax returns are subject to examination by taxing authorities. For financial statement purposes, we only recognize tax positions that it believes are more likely than not of being sustained. There is considerable judgment involved in determining whether positions taken or expected to be taken on the tax return are more likely than not of being sustained. Changes in the liabilities for uncertain tax positions are recognized in the interim period in which the positions are effectively settled or there is a change in factual circumstances.
The following is the activity relating to our UTB reserve liability:
Years Ended December 31,
202420232022
Balance at beginning of year$53,010 $70,593 $25,296 
Increases (decreases) from prior period positions46,762 (18,714)871 
Increases from current period positions15,117 1,131 44,426 
Decreases relating to settlements with tax authorities(524)— — 
Balance at end of year$114,365 $53,010 $70,593 
Interest and penalties related to UTBs are included in our provision for income taxes. We recognized a net expense for interest and penalties of $17,862, $1,475, and $9,683 during the years ended December 31, 2024, 2023, and 2022, respectively. As of December 31, 2024 and 2023, accrued interest and penalties associated with UTBs were $36,126 and $18,264, respectively. The increase in interest and penalties for the year ended December 31, 2024 was primarily due to the interest accruals on our QETC and Investment Tax Credits positions. The increase in interest and penalties for the year ended December 31, 2023 was primarily due to an interest accrual on our QETC reserve position (see discussion above). We are not expecting a material change in this reserve due to expiring statutes, audit activity, or tax payments in the next twelve months. If we were to prevail on all uncertain positions, the net effect would result in an income tax benefit of $87,465.
Altice USA and/or its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state, local and foreign jurisdictions. The most significant jurisdictions in which we are required to file state and local income tax returns include the states of New York, New Jersey, Connecticut, and the City of New York. We are currently under audit by the Internal Revenue Service for tax years 2020 and 2021 and multiple states for various open tax years 2015 and forward. The amount of the liability for unrecognized tax benefits may change in the next twelve months due to the settlement, expiration of the statute of limitations, or change in factual circumstances regarding tax positions taken. Management does not believe that this change nor the resolution of the ongoing income tax examinations will have a material adverse impact on our financial position.