Income Taxes and Tax Receivable Agreement

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes and Tax Receivable Agreement

Income Taxes and Tax Receivable Agreement

The provision for income taxes differs from the amount of income tax computed by applying the applicable U.S. statutory federal income tax rate of 21% to income before provision of income taxes due to Viant Technology LLC’s pass-through structure for U.S. income tax purposes and the valuation allowance against the deferred tax asset in the current and prior-year periods, as well as a pass-through permanent difference related to the forgiveness of the PPP Loan in the prior-year periods. The Company did not recognize an income tax benefit (expense) on its share of pre-tax book income (loss), exclusive of the noncontrolling interest of 76.3% due to the full valuation allowance against its deferred tax assets, resulting in an effective tax rate ("ETR") of 0.0% for the 12 months ended December 31, 2022 and 2021.

The Company is the managing member of Viant Technology LLC and, as a result, consolidates the financial results of Viant Technology LLC in the consolidated financial statements. Viant Technology LLC is a pass-through entity for U.S. federal and most applicable state and local income tax purposes following a corporate reorganization effected in connection with the IPO. As an entity classified as a partnership for tax purposes, Viant Technology LLC is not subject to U.S. federal and certain state and local income taxes. Prior to the IPO during 2021, the Company did not exist and thus no income tax expense was recognized for Viant Technology LLC for the period ended December 31, 2020. Subsequent to the IPO, any taxable income or loss generated by Viant Technology LLC is passed through to and included in the taxable income or loss of its members, including the Company. The Company is taxed as a corporation and pays corporate federal, state and local taxes with respect to income allocated from Viant Technology LLC, based on Viant Technology, Inc.'s 23.7% economic interest in Viant Technology LLC.

The provision for income taxes attributable to the Company consisted of the following for the years ended December 31, 2022 and 2021:

	Year Ended December 31,
	2022		2021
Current:	$	—	$	—
U.S. federal income tax	—		—
State and local income tax	—		—
Foreign income tax	—		—
Deferred:
U.S. federal income tax	—		—
State and local income tax	—		—
Foreign income tax	—		—
Income tax (benefit) provision	$	—	$	—

The effective tax rate for the years ended December 31, 2022 and 2021 was 0.0%. A reconciliation of the statutory tax rate to the effective tax rate for the years presented are as follows:

	Year Ended December 31,
	2022		2021
Income tax benefit (expense) at federal statutory rate	21.0	%	21.0	%
Income passed through to noncontrolling interests	(15.8)	%	(16.7)	%
State and local taxes, net of federal benefit	0.8	%	0.6	%
Permanent items	(0.3)	%	0.7	%
Stock-based compensation	(2.9)	%	(3.2)	%
Credits	0.8	%	—	%
Other, net	0.9	%	—	%
Valuation allowance	(4.5)	%	(2.4)	%
Total effective rate	0.0	%	0.0	%

Set forth below are the tax effects of temporary differences that give rise to a significant portion of the deferred tax assets and deferred tax liabilities.

	Year Ended December 31,
	2022		2021
Deferred tax assets
Net operating loss carryforwards	$	2,561	$	1,321
Tax credits	800		—
Investment in Partnership	7,866		7,909
Other, net	253		108
Subtotal	11,480		9,338
Valuation allowance	(11,480)		(9,338)
Total deferred tax assets	—		—
Deferred tax liabilities
Other, net	—		—
Total deferred tax liabilities	—		—
Net deferred tax (liabilities) assets	$	—	$	—

In assessing the realizability of deferred tax assets, the Company considers whether it is probable that some or all of the deferred tax assets will not be realized. In determining whether the deferred taxes are realizable, the Company considers the period of expiration of the tax asset, historical and projected taxable income, and tax liabilities for the tax jurisdiction in which the tax asset is located. Valuation allowances are provided to reduce the amounts of deferred tax assets to an amount that is more likely than not to be realized based on an assessment of positive and negative evidence, including estimates of future taxable income necessary to realize future deductible amounts. As of December 31, 2022 and 2021, the Company has recorded a valuation allowance against its deferred tax assets of $11.5 million and $9.3 million, respectively, as management cannot conclude whether it is more likely than not that these deferred tax assets will be realized.

As of December 31, 2022 and 2021, the Company has federal net operating losses of approximately $10.4 million and $5.5 million, respectively. As of December 31, 2022 and 2021, the Company has state net operating losses of approximately $6.1 million and $8.1 million, respectively. The federal net operating losses carry forward indefinitely and state net operating losses begin to expire in 2031. As of December 31, 2022, the Company has federal and state research and development tax credits of approximately $0.5 million and $0.3 million, respectively. The federal credits will begin to expire in 2042 and the state credits carryforward until exhausted.

As of December 31, 2022 and 2021, the Company has no significant unrecognized tax benefits and has not recorded interest and penalties related to uncertain tax positions.

The Company is subject to U.S. federal and state income taxes. The Company's U.S. federal and state returns are open to examination for all periods ending December 31, 2020 and thereafter. However, to the extent allowed by law the tax authorities may have the right to examine prior periods where net operating losses were generated and carried forward, and make adjustments up to the amount of the net operating loss or credit carry forward amount.