Note 14 - Income Taxes

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Income Tax Disclosure [Text Block]

14.     Income Taxes

The Company’s effective tax rate is approximately 0.9% and 3.2% for the nine-month periods ended September 30, 2022 and 2021, respectively. The Company's effective tax rate differs from the statutory federal tax rate of 21% for the nine-month periods ended September 30, 2022 and 2021 primarily due to a full valuation allowance recorded on our United States, China and Italy deferred tax assets since we cannot anticipate when or if we will have sufficient taxable income to utilize the deferred tax assets in the future. Further, our effective tax rate differs from the statutory federal tax rate due to state taxes, differences between U.S. and foreign tax rates, foreign losses incurred with no related tax benefit, non-deductible commissions, and non-deductible meals and entertainment expenses for the nine-month periods ended September 30, 2022 and 2021. Income generated in the nine months ended September 30, 2021 attributed to the gain on forgiveness of the Paycheck Protection Plan loan is tax exempt. 

Fuel Tech had no unrecognized tax benefits as of September 30, 2022 and December 31, 2021.