Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Components of income tax expense

The components of the income tax expense are as follows:

	For the Year Ended December 31,
	2021			2020
	(in thousands)
Current Provision:
Unincorporated and Other Business Taxes1	$	1,710		$	937
Local Corporate Tax		118			—
State Corporate Tax		123			15
Federal Corporate Tax		1,060			(103	)
Total Current Provision	$	3,011		$	849
Deferred Provision:
Unincorporated and Other Business Taxes1	$	(126	)	$	(79	)
Local Corporate Tax		447			304
State Corporate Tax		467			267
Federal Corporate Tax		3,999			2,946
Total Deferred Provision	$	4,787		$	3,438
Total Income Tax Expense	$	7,798		$	4,287

During each of the years ended December 31, 2021 and 2020, the operating company recognized a $2.5 million and $1.6 million tax benefit associated with the reversal of uncertain tax position liabilities and interest related to unincorporated and other business tax expenses,

Differences between provisions for income taxes reported for financial reporting purposes and applicable statutory rates

A reconciliation between the provision for income taxes reported for financial reporting purposes, and the application of the statutory U.S. Federal tax rate to the reported income before income taxes for the years ended December 31, 2021 and 2020, were as follows:

	For the Year Ended December 31,
	2021						2020
	Amount			% of Pretax Income			Amount			% of Pretax Income
	(in thousands, except % amounts)
Federal Corporate Tax	$	23,998			21.0	%	$	11,723			21.0	%
State and Local Corporate Tax, net of Federal Benefit		1,155			1.0	%		586			1.0	%
Unincorporated and Other Business Tax1		1,251			1.1	%		678			1.2	%
Non-Controlling Interests		(18,438	)		(16.1	)%		(8,959	)		(16.0	)%
Non-Deductible Share-Based Compensation		20			0.0	%		22			0.0	%
Other		(189	)		-0.2	%		237			0.4	%
Income Tax Expense	$	7,798			6.8	%	$	4,287			7.7	%

1During each of the years ended December 31, 2021 and 2020, the operating company recognized a $2.5 million and $1.6 million tax benefit associated with the reversal of uncertain tax position liabilities and interest related to unincorporated and other business tax expenses, respectively.

Schedule of unrecognized tax benefits roll forward

A reconciliation of the beginning and ending amount of total unrecognized tax benefits for the years ended December 31, 2021 and 2020 are as follows:

	For the Year Ended December 31, 2021
	(in thousands)
Balance at December 31, 2020	$	7,612
Decreases Related to Prior Year Tax Positions		(1,870	)
Increases Related to Current Year Tax Positions		2,593
Balance at December 31, 2021	$	8,335

	For the Year Ended December 31, 2020
	(in thousands)
Balance at December 31, 2019	$	7,193
Decreases Related to Prior Year Tax Positions		(1,210	)
Increases Related to Current Year Tax Positions		1,629
Balance at December 31, 2020	$	7,612

Deferred tax assets and liabilities

The change in the Company’s deferred tax assets for the year ended December 31, 2021, is summarized as follows:

	Section 754			Other			Total
	(in thousands)
Balance at December 31, 2020	$	24,255		$	5,576		$	29,831
Deferred Tax (Expense)		(4,452	)		(334	)		(4,786	)
Tax Impact of Transactions with Non-Controlling Shareholders		—			(1,599	)		(1,599	)
Unit Exchange		2,493			(53	)		2,440
Balance at December 31, 2021	$	22,296		$	3,590		$	25,886

The change in the Company’s deferred tax liabilities, which is included in other liabilities on the Company’s consolidated statements of financial condition, for the year ended December 31, 2021, is summarized as follows:

	Total
	(in thousands)
Balance at December 31, 2020	$	(1	)
Deferred Tax (Expense)		(1	)
Balance at December 31, 2021	$	(2	)

The change in the Company’s deferred tax assets for the year ended December 31, 2020 is summarized as follows:

	Section 754			Other			Total
	(in thousands)
Balance at December 31, 2019	$	27,953		$	4,730		$	32,683
Deferred Tax (Expense)		(4,204	)		771		$	(3,433	)
Tax Impact of Transactions with Non-Controlling Shareholders		—			(239	)	$	(239	)
Unit Exchange		506			314		$	820
Balance at December 31, 2020	$	24,255		$	5,576		$	29,831

The change in the Company’s deferred tax liabilities for the year ended December 31, 2020 is summarized as follows:

	Total
	(in thousands)
Balance at December 31, 2019	$	(2	)
Deferred Tax (Expense)		1
Balance at December 31, 2020	$	(1	)

Net value of the liability to selling and converting shareholders

The change in the Company’s liability to selling and converting shareholders for the years ended December 31, 2021 and 2020, is summarized as follows:

	For the Year Ended December 31,
	2021			2020
	(in thousands)
Beginning Balance	$	25,701		$	28,652
Unit Exchanges		2,119			430
Tax Receivable Agreement Payments		(2,486	)		(2,881	)
Change in Liability		(655	)		(500	)
Ending Balance	$	24,679		$	25,701