ALTA EQUIPMENT GROUP INC

NOTE 12 — INCOME TAXES

The Company recognized an income tax expense of$11.6 million and benefit of $7.3 million for the three months ended September 30, 2024 and 2023, respectively, and$4.7 million expense and$6.9 million benefit for the nine months ended September 30, 2024 and 2023, respectively.

For the three and nine months ended September 30, 2024, the income tax expense was primarily attributable to the Company, after considering updated information, including the filing of the fiscal 2023 federal income tax return, recording a valuation allowance against a portion of the deferred tax asset relating to U.S. disallowed interest expense carryforwards created by the provisions of the Tax Cuts and Jobs Act of 2018 ("TCJA"). During the three and nine months ended September 30, 2023, the income tax benefit was primarily attributable to the release of the valuation allowance on certain U.S. federal and state deferred tax assets. We regularly assess the need for a valuation allowance against our deferred tax assets. In making that assessment, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets as well as the nature of the deferred tax attribute to determine, based on the weight of available evidence, whether it is more likely than not that some or all of the deferred tax assets will not be realized. We will continue to monitor the need for a valuation allowance against our deferred tax assets on a quarterly basis.

The effective tax rate for the nine months ended September 30, 2024 and 2023 was(10.0)% and(176.9)%, respectively. The effective income tax rate in both periods is primarily the result of the discrete items noted above.