Income Taxes

6 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company is taxed as a C corporation.

For interim periods, the provision for income taxes (including federal, state, local and foreign taxes) is calculated based on the estimated annual effective tax rate, adjusted for certain discrete items for the full fiscal year. Cumulative adjustments to the Company's estimate are recorded in the interim period in which a change in the estimated annual effective rate is determined.

Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment.

The Company had an effective tax rate of 26.5% and an effective tax benefit rate of 33.2% for the three and six months ended June 30, 2021, respectively. For the three and six months ended June 30, 2020, the Company had an income tax rate of 27.4% and 14.1%, respectively.

No valuation allowance was required as of June 30, 2021 or December 31, 2020.

The Company had previously recorded a liability for unrecognized tax benefits (“UTB”) related to tax positions taken on its various income tax returns in open tax periods. If recognized, a portion of unrecognized tax benefits would favorably impact the effective tax rate that is reported in future periods. The Company filed to change an improper tax method of accounting in the fourth quarter of 2020 related to the UTB that affords the Company IRS audit protection in past periods. Therefore, the total unrecognized tax benefits were reduced in the fourth quarter of 2020.

The following is a reconciliation of the beginning and ending unrecognized tax benefits:

	June 30, 2021		December 31, 2020
Balance at beginning of period	$	—	$	1,130
Gross increases in prior period tax positions	—		—
Gross increases in current period tax positions	—		—
Decreases related to prior year tax positions	—		(1,130)
Balance at end of period	$	—	$	—