Note 13 - Income Taxes

12 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Income Tax Disclosure [Text Block]

13. INCOME TAXES:

The tax provisions are summarized as follows (in thousands):

	Year Ended December 31,
	2024		2023			2022
Income before income taxes:
Domestic	$	392,253	$	455,288		$	502,141
Foreign		5,562		6,773			7,186
Total		397,815		462,061			509,327
Current provision
Federal	$	62,358	$	87,270		$	93,942
State		9,975		16,864			16,516
Foreign		702		2,265			2,523
Total		73,035		106,399			112,981
Deferred provision (benefit)
Federal		15,283		7,617			7,975
State		3,752		505			(565	)
Foreign		775		(521	)		(3,149	)
Total		19,810		7,601			4,261
Provision for income taxes	$	92,845	$	114,000		$	117,242

A reconciliation of taxes based on the federal statutory rates and the provisions (benefits) for income taxes are summarized as follows (in thousands):

	Year Ended December 31,
	2024						2023					2022
	Amount			Rate			Amount		Rate			Amount			Rate
Income taxes at the federal statutory rate	$	83,540			21.0	%	$	97,032		21.0	%	$	106,959			21.0	%
State income taxes, net of federal benefit (a)		10,030			2.5			14,120		3.1			12,708			2.5
Tax effect of permanent differences		(1,212	)		(0.3	)		1,357		0.3			(488	)		(0.1	)
Foreign tax rate differential		271			0.1			266		0.0			(2134	)		(0.4	)
Other, net		216			0.0			1,225		0.3			197			0.0
Provision for income taxes	$	92,845			23.3	%	$	114,000		24.7	%	$	117,242			23.0	%

(a) State taxes in Texas, California and Illinois made up the majority (greater than 50 percent) of the tax effect in this category

The following summarizes the components of net deferred income tax liabilities included in the balance sheet (in thousands):

	December 31,
	2024			2023
Deferred income tax (assets) liabilities:
Inventory	$	(5,547	)	$	(5,215	)
Accounts receivable		(517	)		(436	)
Vehicle finance lease obligations		(30,696	)		(31,178	)
Finance and operating leases - Liability		(27,522	)		(29,446	)
Stock options		(8,790	)		(8,785	)
Accrued liabilities		(5,604	)		(4,653	)
State net operating loss carry forward		(1,689	)		(1,111	)
State tax credit		29			(34	)
Other		(6,108	)		(6,167	)
Finance and operating leases - Asset		26,970			29,031
Fixed assets and intangibles		238,390			217,565
Net deferred income tax liability	$	178,916		$	159,571

As of December 31, 2024, the Company had approximately $39.2 million in state net operating loss carry forwards that expire from 2030 to 2043, which result in a deferred tax asset of approximately $1.7 million. The Company has evaluated whether its state net operating losses are realizable and has not recorded a valuation allowance against them. The valuation allowance did not change over the prior year ending December 31, 2023.

The Company had unrecognized income tax benefits totaling $8.0 million as a component of accrued liabilities as of December 31, 2024, and $6.7 million as of December 31, 2023, the total of which, if recognized, would impact the Company’s effective tax rate. An unfavorable settlement would require a charge to income tax expense and a favorable resolution would be recognized as a reduction to income tax expense. The Company recognizes interest accrued related to unrecognized tax benefits in income tax expense. During the years ended December 31, 2024, 2023 and 2022, the Company recognized approximately $197,700, $86,200, and $22,800 in interest expense. No amounts were accrued for penalties. The Company had approximately $530,000, $389,000 and $302,000 of interest accrued as of December 31, 2024, 2023 and 2022, respectively.

Undistributed earnings of certain of the Company’s foreign subsidiaries amounted to approximately $26.1 million at December 2024 and $22.9 million at December 2023. Those earnings are considered to be indefinitely reinvested. Upon repatriation of those earnings in the form of dividends or otherwise, the Company may be subject to state and local taxes, and/or withholding taxes payable to the various foreign countries. The Company expects to be able to take a 100% dividends received deduction to offset any U.S. federal income tax liability on the distribution of untaxed earnings and profits.

The Company does not anticipate a significant change in the amount of unrecognized tax benefits in the next 12 months. As of December 31, 2024, the tax years ended December 31, 2021 through 2024 remained subject to audit by federal tax authorities and the tax years ended December 31, 2020 through 2024, remained subject to audit by state tax authorities.

The table below presents the reconciliation of the change in the unrecognized tax benefits (in thousands):

	2024			2023			2022
Unrecognized tax benefits at beginning of period	$	6,771		$	5,377		$	4,309
Gross increases – tax positions in current year		1,937			2,582			2,025
Reductions due to lapse of statute of limitations		(645	)		(1,188	)		(957	)
Unrecognized tax benefits at end of period	$	8,063		$	6,771		$	5,377