Income Taxes

6 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 8 – INCOME TAXES

A reconciliation of the Company’s statutory rate to the effective tax rate for the three and six months ended June 30, 2024 and 2023 is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Statutory tax rate		21.0	%		21.0	%		21.0	%		21.0	%
State taxes, net of federal benefit		6.0	%		5.8	%		6.0	%		5.8	%
Executive compensation		1.7	%		1.3	%		1.7	%		1.3	%
Corporate-owned life insurance		(0.3	%)		(0.2	%)		(0.3	%)		(0.3	%)
Other permanent differences		0.6	%		0.9	%		0.4	%		0.5	%
Prior year tax adjustments		0.6	%		(3.5	%)		0.3	%		(1.8	%)
Capital loss		—			(21.3	%)		—			(10.6	%)
Valuation allowance		1.0	%		1.4	%		1.0	%		1.2	%
Equity-based compensation		—			—			(2.4	%)		(2.1	%)
Uncertain tax position		2.3	%		—			2.3	%		—
Tax credits		(6.6	%)		(1.0	%)		(6.6	%)		(1.0	%)
Effective tax rate		26.3	%		4.4	%		23.4	%		14.0	%

The uncertain tax position and tax credits recognized during the three and six months ended June 30, 2024 are both primarily related to the Research & Experimentation (“R&E”) credits.

The Company’s effective income tax rate was higher for the three months and six months ended June 30, 2024 as compared to 2023 primarily due to restructuring of the ownership of the Company’s Canadian entities for tax purposes during the second quarter of 2023 which reduced the Company’s 2023 effective tax rate.