Global Water Resources, Inc.

13. Income Taxes

Our interim effective tax rates reflect the estimated annual effective tax rates for 2025 and 2024 applied to year-to-date pretax income, adjusted for tax expense associated with certain discrete items. The effective tax rates for the three months ended June 30, 2025 and 2024 were 27.7% and 25.7%, respectively. The effective tax rates for the six months ended June 30, 2025 and 2024 were 26.6% and 24.9%, respectively.

The increase in the effective tax rate for the three months ended June 30, 2025 compared to the prior year period was primarily attributable to differences between book and taxable compensation expense associated with share-based compensation awards vested in the second quarter of 2025.

The increase in the effective tax rate for the six months ended June 30, 2025 compared to the prior year period was primarily attributable to the reduction in deferred tax assets in the prior year period.

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act into law, enacting significant changes to U.S. federal tax law. While we are currently evaluating the impacts of this new legislation, we do not anticipate a material impact on our results of operations, cash flows and financial position.