13. Income Taxes

The following table provides a comparative summary of the Company’s income tax expense and effective tax rate for the three and nine months ended September 30, 2018 and 2017, in thousands of dollars:


		Three Months ended September 30,						Nine Months ended September 30,
		2018			2017			2018			2017
	(unaudited)							(unaudited)
Income tax expense		$	8,360		$	6,949		$	16,309		$	21,932
Effective tax rate			23.0	%		30.3	%		16.1	%		33.5	%

The income tax expense for the three and nine months ended September 30, 2018 is attributable to U.S. federal and state income taxes.

For the three months ended September 30, 2018, the Company recorded $8.4 million of income tax expense, an increase from $6.9 million compared to the three months ended September 30, 2017. The increase in income tax expense is primarily due to the increase in taxable earnings.

For the nine months ended September 30, 2018, the Company recorded $16.3 million of income tax expense, a decrease from $21.9 million compared to the nine months ended September 30, 2017. The decrease in income tax expense is primarily due to the reduction of the U.S. statutory corporate income tax rate, from 35% to 21%, as a result of the Tax Cuts and Jobs Act passed on December 22, 2017 coupled with excess tax benefits related to exercises of employee stock options.

The decrease in the effective tax rate for the three and nine months ended September 30, 2018 as compared to the same periods in the prior year is primarily attributable to the income tax rate reduction and excess tax benefits related to exercises of employee stock options. For the three and nine months ended September 30, 2018, the Company recorded income tax benefits of approximately $700,000 and $7.0 million, respectively, as a result of the Company recognizing excess tax benefits related to the exercises of employee stock options. These tax benefits caused the effective tax rate to be less than the Company’s statutory annual effective tax rate for the three and nine months ended September 30, 2018.