Income Taxes

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Note 14 – Income Taxes

Income tax provisions for interim quarterly periods are generally based on an estimated annual effective income tax rate calculated separately from the effect of significant, infrequent or unusual items related specifically to interim periods. The income tax impact of discrete items are recognized in the period these occur.

The Company’s income tax expense for the periods presented and reconciliation of this amount to amounts calculated based on statutory tax rates follows:

	Three months ended June 30						Six months ended June 30
	2022			2021			2022			2021
Income taxes computed at the federal statutory rate	$	(803,226	)	$	6,333,505		$	4,447,290		$	17,051,034
Effect of:
State taxes, net of federal benefits		675,275			481,501			675,275			638,354
Income of flow-through entities		238,172			(6,333,505	)		(4,836,021	)		(17,051,034	)
Change in tax status of Nutex Health Holdco LLC		20,775,898			—			20,775,898			—
Reversal of acquired Clinigence valuation allowance		(2,393,178	)		—			(2,393,178	)		—
Other permanent items, net		1,160,345			—			1,160,345			—
Total income tax expense	$	19,653,286		$	481,501		$	19,829,609		$	638,354

In periods before the merger with Clinigence, Nutex Health Holdco LLC and the Nutex Subsidiaries were pass-through entities treated as partnerships for U.S. federal income tax purposes. No provision for federal income taxes was provided for these periods as federal taxes were obligations of these companies’ members. After the merger, Nutex Health Holdco LLC became a wholly-owned subsidiary of Clinigence and will be included in its future consolidated corporate tax filings. We recognized a non-cash charge of $20,775,898 to income tax expense during the three months ended June 30, 2022 for the change in tax status of Nutex Health Holdco LLC. This charge provides for the accumulated net deferred tax liabilities representing the differences between the book and tax bases of Nutex Health Holdco LLC’s assets and liabilities as of the April 1, 2022 change in tax status.

At the time of our merger with Clinigence, Clinigence had a full valuation allowance against its deferred tax assets. During the three months ended June 30, 2022, we recorded a non-cash benefit of $2,393,178 to income tax expense to remove the acquired valuation allowance after we concluded that the associated deferred tax assets would be realizable.

Each of the discrete items above are one-time, non-cash items. Excluding the discrete items above, our effective tax rate for the three months ended June 30, 2022 was 25.2%.