Income Taxes

9 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 8. Income Taxes

The effective tax rate for the three and nine months ended September 30, 2024 and 2023 differs from the United States federal statutory rate primarily as a result of state and local income taxes, excess tax benefits on share-based compensation and certain non-deductible expenses.

For the three months ended September 30, 2024 and 2023, the provision for income taxes was $25.5 million and $13.9 million, or 23.7% and 21.1%, of pre-tax income, respectively. For the nine months ended September 30, 2024 and 2023, the provision for income taxes was $63.2 million and $44.4 million, or 23.0% and 22.0% of pre-tax income, respectively.

The effective tax rates for the three and nine months ended September 30, 2024 were higher than the effective tax rates for the same periods in 2023 due to decreased excess tax benefits on share-based compensation and increased non-deductible expenses.

No valuation allowance was recorded for deferred tax assets in the period ended September 30, 2024 and 2023.

The Organization for Economic Co-operation and Development has released a framework (“Pillar 2”) to introduce a global minimum tax of 15% for companies with global revenues and profits above certain thresholds. Certain aspects of Pillar 2 are effective January 1, 2024, and other aspects are effective January 1, 2025. Although the U.S. has not yet enacted legislation to adopt Pillar 2, certain countries have already adopted, or are in the process of adopting, legislation to implement Pillar 2. The Company continues to analyze Pillar 2 but does not currently expect it to have a material impact on our effective tax rate or on our consolidated balance sheet, statement of operations or statement of cash flows.