Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

9. Income Taxes

The provision for income taxes consists of the following:

	Year Ended December 31,
		2023			2022			2021
	(In thousands)
Current:
Federal	$		49,028		$	52,865		$	36,661
State and local			4,047			20,716			17,238
Foreign			27,385			21,030			19,018
Total current provision			80,460			94,611			72,917
Deferred:
Federal			(2,823	)		(5,830	)		2,249
State and local			(754	)		(1,350	)		778
Foreign			(2,238	)		633			91
Total deferred provision			(5,815	)		(6,547	)		3,118
Provision for income taxes	$		74,645		$	88,064		$	76,035

Pre-tax income from U.S. operations was $228.8 million, $236.4 million and $234.6 million for the years ended December 31, 2023, 2022 and 2021, respectively. Pre-tax income from foreign operations was $103.9 million, $101.9 million and $99.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The difference between the U.S. federal statutory tax rate of 21.0% and the Company's effective tax rate is as follows:

	Year Ended December 31,
	2023				2022				2021
U.S. federal statutory tax rate		21.0		%		21.0		%		21.0		%
State and local taxes - net of federal benefit		0.8				4.6				4.4
Tax credits		(1.0	)			(0.4	)			(0.4	)
Foreign rate differential benefit		0.9				(0.1	)			(0.2	)
Excess tax benefit from stock-based compensation		0.1				(0.1	)			(2.9	)
Other, net		0.6				1.0				0.9
Effective tax rate		22.4		%		26.0		%		22.8		%

The following is a summary of the Company’s net deferred tax assets:

		As of December 31,
		2023				2022
		(In thousands)
Deferred tax assets:
Stock compensation expense	$		4,441		$		3,451
Operating lease liabilities			17,128				17,842
Deferred Compensation			2,596				2,425
Other			1,015				1,774
Total deferred tax assets			25,180				25,492
Valuation allowance			—				—
Net deferred tax assets			25,180				25,492
Deferred tax liabilities:
Depreciation			(8,617	)			(9,956	)
Capitalized software development costs			—				(3,923	)
Goodwill and intangible assets			(3,987	)			(4,829	)
Operating lease right-of-use assets			(13,507	)			(14,176	)
Other deferred tax liabilities			(276	)			—
Deferred tax (liability) asset, net	$		(1,207	)	$		(7,392	)

The Company or one of its subsidiaries files U.S. federal, state and foreign income tax returns. In 2022, the Company settled its New York State income tax examination for tax years 2010 through 2014 and is currently under a New York State income tax examination for tax years 2015 through 2017 and a New York City income tax examination for the tax years 2016 through 2018. At this time, the Company cannot estimate when the examinations will conclude or the impact such examinations will have on the Company’s Consolidated Financial Statements, if any. Generally, other than New York City and State, the Company is no longer subject to tax examinations by tax authorities for years prior to 2020.

A reconciliation of the unrecognized tax benefits is as follows:

	Year Ended December 31,
		2023			2022				2021
	(In thousands)
Balance at beginning of year		$	9,835			$	15,089			$	16,317
Increase/(decrease) based on tax positions related to prior periods			—				160				(1,228	)
(Decrease) related to settlements with taxing authorities			(6,705	)			(5,414	)			—
Balance at end of year		$	3,130			$	9,835			$	15,089

As of December 31, 2023, the Company recorded $3.1 million of net unrecognized tax benefits which, if recognized, would affect the Company’s effective tax rate. The Company estimates that this remaining unrecognized tax benefit will be settled within the next 12 months. However, due to the uncertainty related to the timing and potential outcome of the audits, the Company cannot reasonably estimate the amount of any additional unrecognized tax benefit that could be adjusted in the next 12 months. During the years ended December 31, 2023, 2022 and 2021, the Company recognized gross expenses of $1.6 million, $5.8 million and $3.3 million, respectively, in penalties and interest. The Company had $2.6 million and $7.9 million accrued for the payment of interest and penalties as of December 31, 2023 and 2022, respectively.

The Company will recognize any U.S. income tax expense the Company may incur on global intangible low-taxed income as income tax expense in the period in which the tax is incurred.