Income Taxes

3 Months Ended

Apr. 01, 2023

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 11. INCOME TAXES

The income tax provision for interim periods is comprised of tax on ordinary income provided at the most recent estimated annual effective tax rate, adjusted for the tax effect of discrete items. We estimate the annual effective tax rate quarterly based on the forecasted annual pre-tax results of our operations. The tax effects of items that are unrelated to current year ordinary income are recognized entirely as discrete items in the period identified, including share-based compensation, changes in tax laws and adjustments to the actual liability determined upon filing tax returns.

We had income tax expense of $11.2 million for the three months ended April 1, 2023, compared with income tax expense of $7.8 million for the three months ended April 2, 2022. Our effective tax rate for the three months ended April 1, 2023, was 24.6%, compared with 24.7% for the three months ended April 2, 2022. Our income tax expense for the three months ended April 1, 2023, and April 2, 2022, includes income tax expenses of $654 thousand and $505 thousand, respectively, relating to our 75% share of the pre-tax earnings of Eco.

Income tax expense in the three months ended April 1, 2023 includes discrete items of income tax benefit relating to excess tax benefits from the lapses of restrictions on stock awards, which totaled $438 thousand. The income tax benefit in the three months ended April 2, 2022 included discrete items of income tax benefit relating to excess tax benefits from the lapses of restrictions on stock awards totaling $136 thousand. Excluding discrete items of income tax, the effective tax rates for the three months ended April 1, 2023 and April 2, 2022, would have been an income tax expense rate of 25.6% and 25.1%, respectively.

During the first three months of 2023, we made payments of estimated taxes totaling $16.4 million, which included $8.8 million in Federal estimated income taxes with the remainder to various states, primarily Florida. We were not required to make any payments of estimated federal or state income taxes during the first three months of 2022. We had accrued federal and state income taxes payable of $11.2 million and $16.4 million at April 1, 2023, and December 31, 2022, respectively.