Income Taxes

9 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

9. Income Taxes

Guardian Pharmacy Services, Inc. is taxed as a corporation and is subject to paying corporate federal and state and local taxes on the income allocated to it from its 100% ownership of Guardian Pharmacy, LLC, which includes economic interest held in the Non-Converted Subsidiaries, as well as any stand-alone income or loss it generates. The Non-Converted Subsidiaries are treated as a partnership for U.S. federal and most applicable state and local income tax purposes. Prior to the Corporate Reorganization, Guardian Pharmacy, LLC was comprised of entities treated as partnerships for income tax purposes. As a partnership it was not subject to U.S. federal and certain state and local income taxes. As a result of the Corporate Reorganization, the Company is subject to federal and state corporate income taxes beginning on September 27, 2024.

The Company’s effective tax rate for the period subsequent to the Corporate Reorganization, September 27, 2024 through September 30, 2024, was -0.1% percent. This is lower than the federal statutory rate of 21 percent due to the $122,355 incremental share-based compensation charge upon the modification of certain Restricted Interest Units in connection with the Corporate Reorganization and IPO (see Note 8—Share-based Compensation for further detail on the share-based compensation charge) . These compensation costs are not deductible for federal and state income taxes.

The Company’s effective tax rate for periods prior to the Corporate Reorganization was zero percent because Guardian Pharmacy, LLC was not taxed at the entity level prior to the Corporate Reorganization.

As a result of the Corporate Reorganization, the Company received tax basis for the $55,176 in cash payments (the “tax step-up”) related to the Merger Consideration. To reflect this new taxability at the corporate level and the tax step-up, the Company recorded an incremental net deferred tax asset through additional paid-in capital of $5,973. At the Corporate Reorganization, the Company concluded, based on all positive and negative evidence that it is more likely than not that all deferred tax assets will be utilized.

No uncertain tax positions existed as of September 30, 2024.