Income Taxes

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 9 – INCOME TAXES

The Company’s effective tax rate for the three months ended June 30, 2023 and 2022 was 4.4% and 28.6%, respectively, and 14.0% and 28.1% for the six months ended June 30, 2023 and 2022, respectively.

A reconciliation of the Company’s statutory rate to the effective tax rate for the three and six months ended June 30, 2023 and 2022 is as follows:

	Three months ended June 30,						Six months ended June 30,
	2023			2022			2023			2022
Taxes at statutory rate		21.0	%		21.0	%		21.0	%		21.0	%
State taxes, net of federal benefit		5.8	%		5.6	%		5.8	%		5.6	%
Executive compensation		1.3	%		1.5	%		1.3	%		1.5	%
Corporate-Owned Life Insurance		(0.2	%)		0.6	%		(0.3	%)		0.9	%
Other permanent differences		0.9	%		0.6	%		0.5	%		0.5	%
Prior year tax adjustments		(3.5	%)		(0.5	%)		(1.8	%)		(0.5	%)
Capital Loss		(21.3	%)		—			(10.6	%)		—
Valuation allowance		1.4	%		1.0	%		1.2	%		1.0	%
Equity-based compensation		—			(0.7	%)		(2.1	%)		(1.4	%)
Tax credits		(1.0	%)		(0.5	%)		(1.0	%)		(0.5	%)
Taxes at effective rate		4.4	%		28.6	%		14.0	%		28.1	%

The Company restructured the ownership of its Canadian entities for tax purposes during the second quarter of 2023, resulting in a decrease in the Company’s effective income tax rate for the three months and the six months ended 2023 compared to 2022.

The Company is subject to federal income tax as well as taxes in various state, local, and foreign jurisdictions. Tax statutes and regulations within each jurisdiction are subject to interpretation and require the application of significant judgment. The Company’s 2019 through 2021 tax years remain subject to examination by the Internal Revenue Service for federal tax purposes. Certain significant state, local, and foreign tax returns also remain open under the applicable statutes of limitations and, as such, are subject to examination for the tax years from 2018 to 2021.