Income Taxes

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

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 assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management continues to conclude that we did not meet the “more likely than not” requirement in order to recognize deferred tax assets on the remaining amounts and a valuation allowance has been recorded for substantially all of our net deferred tax assets at September 30, 2023 and December 31, 2022.

We believe that any adjustment to our uncertain tax positions would not have a material impact on our financial statements given the Company’s deferred tax and corresponding valuation allowance position as of September 30, 2023 and December 31, 2022.

As of December 31, 2022, we had approximately $1.2 billion in net operating loss carryforwards (“NOL carryforwards”); however, we currently have a valuation allowance against this and substantially all of our other deferred taxed assets. At each reporting date, we will consider evidence, both positive and negative, to determine realization of our deferred income tax assets, including NOL carryforwards. Valuation allowances for deferred income tax assets are recognized when it is more likely than not that some or all of the benefit from the deferred income tax assets will not be realized. We have begun to sustain a level of increased profitability. Should this continue, we will evaluate whether this new evidence will be sufficient to provide for realization of our deferred income tax assets, and if so, this new evidence may result in a reversal of our valuation allowance in the next twelve months.

Our net taxable income must be apportioned to various states based upon the income tax laws of the states in which we derive our revenue. Our NOL carryforwards will not always be available to offset taxable income apportioned to the various states. The states from which our refining, retail, and logistics revenues are derived are not the same states in which our NOLs were incurred; therefore, we expect to incur state tax liabilities in connection with our refining, retail, and logistics operations.