Income Taxes

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company adjusts its effective tax rate each quarter to be consistent with the estimated annual effective tax rate. The Company also records the tax effect of unusual or infrequently occurring discrete items.

The provision for income taxes is shown in the tables below:

	Three Months Ended September 30
	2022		2021
Income tax expense	$	6,243	$	1,913

	Nine Months Ended September 30
	2022		2021
Income tax expense	$	7,137	$	4,654

Income tax expense increased $4.3 million to $6.2 million in the third quarter of 2022 primarily due to a decrease in the refunds of excess deferred income taxes.

Income tax expense increased $2.5 million to $7.1 million in the first nine months of 2022 primarily due to a decrease in the refunds of excess deferred income taxes.

The Company’s effective tax rate was 11.4% before discrete items as of September 30, 2022 and 4.3% as of September 30, 2021. The increase in the effective tax rate was primarily due to a decrease in the refunds of excess deferred income taxes.

The Company had unrecognized tax benefits of approximately $16.9 million and $14.9 million as of September 30, 2022 and 2021, respectively. Included in the balance of unrecognized tax benefits as of September 30, 2022 and 2021, is $4.2 million and $3.9 million, respectively, of tax benefits that, if recognized, would result in an adjustment to the Company’s effective tax rate. The Company does not expect its unrecognized tax benefits to change significantly within the next 12 months.