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Income Taxes
 12 Months Ended
Sep. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company is a corporation and, as a result is subject to U.S. federal, state and local income taxes. OneWater LLC is treated as a pass-through entity for U.S. federal tax purposes and in most state and local jurisdictions. As such, OneWater LLC’s members, including the Company, are liable for federal and state income taxes on their respective shares of OneWater LLC’s taxable income.
The components of income tax (benefit) expense are:
($ in thousands)Year Ended September 30,
2025		Year Ended September 30,
2024		Year Ended September 30,
2023
Current:
Federal$93 $(424)$16,184 
State457 601 3,434 
Foreign— — — 
550 177 19,618 
Deferred:
Federal(30,411)(152)(19,171)
State(5,440)(182)(3,859)
Foreign— — — 
(35,851)(334)(23,030)
Income tax (benefit) expense$(35,301)$(157)$(3,412)
A reconciliation of the United States statutory income tax rate to the Company’s effective income tax rate is as follows:
For the Years Ended September 30,
202520242023
Statutory federal tax rate21.0 %21.0 %21.0 %
Income attributable to non-controlling interests and nontaxable income(0.2)(1.3)(0.2)
State income taxes, net of federal benefit3.4 (2.4)3.3 
Non-deductible items(1.1)(23.3)— 
Federal and state credits0.4 10.1 — 
Loss on impairment— — (11.4)
Other(0.1)(1.7)(4.7)
Effective income tax rate23.4 %2.4 %8.0 %
Details of the Company’s deferred tax assets and liabilities are as follows:
($ in thousands)September 30, 2025September 30, 2024
Deferred tax assets:
Investment in partnerships$51,030 $24,496 
Tax receivable agreement9,265 10,071 
Net operating loss8,130 1,216 
Other4,162 1,495 
Total72,587 37,278 
Valuation allowance— — 
Total deferred tax assets72,587 37,278 
Deferred tax liabilities:
Fixed assets$— $— 
Intangibles— — 
Other— — 
Total deferred tax liabilities— — 
Deferred tax assets, net$72,587 $37,278 
The Company had federal net operating loss carryforwards from underlying corporate entities of approximately $32.0 million and $4.3 million resulting in a deferred tax asset of $6.7 million and $0.9 million as of September 30, 2025 and 2024, respectively. The U.S. federal net operating loss carryforwards have no expiration but can only be used to offset up to 80% of future taxable income annually. As a result of various state net operating loss carryforwards, the Company had deferred tax assets of $1.4 million and $0.3 million as of September 30, 2025 and 2024, respectively. The state net operating loss carryforward period varies by state, as well as conformity to the 80% limitation. The Company projects to fully utilize the net operating losses in subsequent fiscal years.
The Company has IRC Section 163(j) interest expense carryforward of approximately $9.7 million and $3.7 million as of September 30, 2025 and 2024, respectively, resulting in a deferred tax asset of $2.4 million and $0.9 million as of September 30, 2025 and 2024, respectively. The Company also recorded an additional deferred tax asset of $0.2 million related to state 163(j) interest expense carryforwards as of September 30, 2025. The Section 163(j) interest expense carryforward has no expiration.
The Company recognizes deferred tax assets to the extent it believes these assets are more-likely-than-not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing temporary differences, projected future taxable income, tax planning strategies and recent results of operations. Based on our cumulative earnings history and forecasted future sources of taxable income, we believe that we will fully realize our deferred tax assets in the future. The Company has not recorded a valuation allowance.
As of September 30, 2025 and 2024, the Company has not recognized any uncertain tax positions, penalties, or interest as management has concluded that no such positions exist. The Company is subject to examination in the US Federal and certain state tax jurisdictions for the tax years beginning with the year ended December 31, 2020. In November 2024, the Company received notification that the Florida Department of Revenue intended to commence a corporate income tax audit of OneWater Inc for the tax years ended September 30, 2021, 2022 and 2023. The Company received a letter from the Florida Department of Revenue in September 2025 noting the audit was complete with no significant adjustments.
Tax Receivable Agreement
In connection with the IPO, the Company entered into a tax receivable agreement (the “Tax Receivable Agreement”) with certain of the owners of OneWater LLC. As of September 30, 2025 and 2024, our undiscounted liability under the Tax Receivable Agreement was $37.5 million and $40.6 million, respectively, representing 85% of the calculated net cash savings in U.S. federal, state and local income tax and franchise tax that OneWater Inc anticipates realizing in future years from the result of certain increases in tax basis and certain tax benefits attributable to imputed interest as a result of OneWater Inc’s acquisition of OneWater LLC Units pursuant to an exercise of the Redemption Right or the Call Right (each as defined in the fourth amended and restated limited liability company agreement of OneWater LLC (the “OneWater LLC Agreement”)).
The projection of future taxable income involves significant judgment. Actual taxable income may differ from our estimates, which could significantly impact our ability to make payments under the Tax Receivable Agreement. We have determined it is more-likely-than-not that we will be able to utilize all of our deferred tax assets subject to the Tax Receivable Agreement; therefore, we have recorded a liability under the Tax Receivable Agreement related to the tax savings we may realize from certain increases in tax basis and certain tax benefits attributable to imputed interest as a result of OneWater Inc’s acquisition of OneWater LLC Units pursuant to an exercise of the Redemption Right or Call Right (each as defined in the OneWater LLC Agreement). If we determine the utilization of these deferred tax assets is not more-likely-than-not in the future, our estimate of amounts to be paid under the Tax Receivable Agreement would be reduced. In this scenario, the reduction of the liability under the Tax Receivable Agreement would result in a benefit to our consolidated statements of operations.