Income Taxes

6 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

AWR’s effective income tax rate (“ETR”) was 24.5% and 25.5% for the three months ended June 30, 2024 and 2023, respectively, and was 24.4% and 24.7% for the six months ended June 30, 2024 and 2023, respectively. GSWC’s ETR was 25.2% and 26.2% for the three months ended June 30, 2024 and 2023, respectively, and was 25.0% and 25.5% for the six months ended June 30, 2024 and 2023, respectively.

The AWR and GSWC ETRs differed from the federal corporate statutory tax rate of 21% primarily due to (i) state taxes; (ii) permanent differences, including certain tax effects from stock compensation; (iii) the ongoing amortization of the excess deferred income tax liability; and (iv) differences between book and taxable income that are treated as flowed-through adjustments in accordance with regulatory requirements (principally from plant, rate-case, and compensation-related items). As regulated utilities, GSWC and BVES treat certain temporary differences as being flowed-through to customers in computing their income tax expense consistent with the income tax method used in their CPUC-jurisdiction rate making. Flowed-through items either increase or decrease tax expense and thus impact the ETR.