13. INCOME TAXES

The Company is subject to U.S. federal and various state income taxes.

The income tax provision (benefit) for the years ended December 31, 2022, 2021 and 2020 consisted of the following:

SCHEDULE OF INCOME TAX PROVISION (BENEFIT)  

No federal or state current tax provision has been recorded for the years ended December 31, 2022, 2021, and 2020 because the Company had net operating losses for federal and state tax purposes. However, due to the merger with SemaConnect, for the year ended December 31, 2022, a current foreign tax provision was recorded related to the Company’s operations in India. The net operating loss carryovers may be subject to annual limitations under Internal Revenue Code Section 382, and similar state provisions, should there be a greater than 50% ownership change as determined under the applicable income tax regulations. The amount of the limitation would be determined based on the value of the company immediately prior to the ownership change and subsequent ownership changes could further impact the amount of the annual limitation. An ownership change pursuant to Section 382 may have occurred in the past or could happen in the future, such that the NOLs available for utilization could be significantly limited. The Company will perform a Section 382 analysis in the future. The related decrease in the deferred tax asset will be offset by the decrease in valuation allowance.

BLINK CHARGING CO.

Notes to Consolidated Financial Statements

(in thousands except for share and per share amounts)

13. INCOME TAXES – CONTINUED

A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:

SUMMARY OF RECONCILIATION OF STATUTORY FEDERAL INCOME TAX RATE AND EFFECTIVE INCOME TAX RATE  

The Company has determined that a valuation allowance for the entire net deferred tax asset is required. A valuation allowance is required if, based on the weight of evidence, it is more likely than not that some or the entire portion of the deferred tax asset will not be realized. After consideration of all the evidence, both positive and negative, management has determined that a full valuation allowance is necessary to reduce the deferred tax asset to zero, the amount that will more likely not be realized.

The disaggregation of the Company’s domestic and foreign pre-tax loss for the years ended December 31, 2022, 2021, and 2020 is as follows:

SCHEDULE OF DISAGGREGATION OF DOMESTIC AND FOREIGN PRE-TAX LOSS  

BLINK CHARGING CO.

Notes to Consolidated Financial Statements

(in thousands except for share and per share amounts)

13. INCOME TAXES – CONTINUED

The tax effects of temporary differences that give rise to deferred tax assets and liabilities are presented below:

SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES  

As of December 31, 2022, the Company had net operating loss carry forwards for federal income tax purposes of approximately $246,296 of which, $84,934 may be used to offset future taxable income through 2037 and the remaining $161,361 of net operating loss carry forwards incurred after 2017, do not have an expiration date. In addition, state NOLs carryforwards available are approximately $165,872, as of December 31, 2022.The Company also has approximately $623 in business credits expiring between 2030 and 2042.

BLINK CHARGING CO.

Notes to Consolidated Financial Statements

(in thousands except for share and per share amounts)