Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

10. Income Taxes

The income tax provision consists of the following (in thousands):

	2022		2021		2020
Current:
U.S. federal	$	68,934	$	62,222	$	24,311
State		20,058		12,997		5,364
Total current income tax provision		88,992		75,219		29,675
Deferred:
U.S. federal		21,440		3,915		8,255
State		194		404		8
Total deferred income tax provision		21,634		4,319		8,263
Total income tax provision	$	110,626	$	79,538	$	37,938

A reconciliation between income taxes at the federal statutory rate (21 percent) and the actual income tax provision is as follows (in thousands):

	2022			2021			2020
Provision at federal statutory rate	$	98,290		$	69,856		$	37,018
State income taxes, net of federal benefit		16,274			11,435			5,664
Tax credits		(1,355	)		(1,754	)		(1,424	)
Excess tax benefit on stock compensation		(1,578	)		(793	)		(4,500	)
Other, net		(1,005	)		794			1,180
Total provision	$	110,626		$	79,538		$	37,938

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax (liabilities) assets are comprised of the following at December 31 (in thousands):

	2022			2021
Depreciation	$	(183,276	)	$	(165,405	)
Leases		(30,886	)		(27,876	)
Other		(5,471	)		(4,658	)
Gross deferred tax liabilities		(219,633	)		(197,939	)
Allowance for doubtful accounts		1,435			1,374
Equity-based compensation		4,089			3,626
Employee benefits		9,988			8,516
Leases		30,578			27,357
Claims and insurance		22,137			27,351
Other		5,635			5,578
Gross deferred tax assets		73,862			73,802
Net deferred tax liability	$	(145,771	)	$	(124,137	)

The Company has determined that a valuation allowance was not necessary at December 31, 2022 or 2021 for substantially all deferred tax assets since it is more likely than not they will be realized from future reversals of temporary differences or future taxable income.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. For the U.S. federal jurisdiction, tax years 2019-2022 remain open to examination. The expiration of the statute of limitations related to the various state income tax returns that the Company files varies by state. In general, tax years 2013-2022 remain open to examination by the various state and local jurisdictions. However, a state could challenge certain tax positions back to the 2009 tax year.

A reconciliation of the beginning and ending total amounts of gross unrecognized tax benefits is as follows (in thousands):

	2022			2021
Gross unrecognized tax benefits at beginning of year	$	1,370		$	1,052
Gross (decreases) increases in tax positions for prior years		1,779			(4	)
Gross increases in tax positions for current year		1,005			598
Settlements		—			(96	)
Lapse of statute of limitations		(287	)		(180	)
Gross unrecognized tax benefits at end of year	$	3,867		$	1,370

The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. The total amount of unrecognized tax benefits, which is recorded within claims, insurance and other liabilities on the consolidated balance sheets, that would affect the Company’s effective tax rate if recognized is $3.9 million and $1.4 million as of December 31, 2022 and 2021, respectively. The Company paid cash for income taxes of $115.3 million, $81.6 million, and $10.0 million in 2022, 2021 and 2020, respectively.

The Company does not anticipate total unrecognized tax benefits will significantly change during the next twelve months due to the settlements of audits and the expiration of statutes of limitations.