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Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company is taxed as a C Corporation.
On March 27, 2020, the CARES Act was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, allows NOLs incurred in 2018, 2019 and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. This allowed the Company to carryback net operating losses generated in 2018 and 2019 to prior tax years and generate a tax refund. The total refund generated by this carryback for the year ended December 31, 2020 was $1.6 million, of which all has been received.
The income tax provision from income taxes for December 31, 2021 and 2020 consisted of the following:
For the Years Ended
(in thousands)December 31, 2021December 31, 2020
Current tax provision
U.S. Federal$812 $1,274 
State and local194 1,209 
Total current tax provision1,006 2,483 
Deferred tax provision (benefit)
U.S. Federal1,127 (643)
State and local630 (658)
Total deferred tax provision (benefit)1,757 (1,301)
Income tax provision$2,763 $1,182 
In assessing the realizability of deferred tax assets, management considered whether it is more likely than not that some portion or all deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. In assessing the need for a valuation allowance, the Company considered both positive and negative evidence related to the likelihood of realization of the deferred tax assets. After giving consideration to these factors, management concluded that it was more likely than not that the deferred tax assets would be fully realized, and as a result, no valuation allowance against the deferred tax assets was deemed necessary at December 31, 2021 and 2020.
The components of deferred tax assets (liabilities) were as follows:
As of As of December 31,
(in thousands)20212020
Deferred tax assets:
Accrued expenses$1,328 $2,096 
Allowance for doubtful accounts68 71 
Intangibles524 784 
Goodwill3,304 3,746 
Startup costs79 91 
Stock-based compensation881 501 
Lease liabilities5,547 5,268 
Accrued bonuses and commissions1,810 2,030 
Warrant— 535 
Total deferred tax assets13,541 15,122 
Deferred tax liabilities:
Fixed assets(3,775)(3,813)
Right-of-use assets(5,231)(4,975)
Debt discounts— (155)
   Percentage of completion(205)(92)
Total deferred tax liabilities(9,211)(9,035)
Net deferred tax asset$4,330 $6,087 
At December 31, 2021 and 2020, the Company had no net operating loss carryforwards.
A reconciliation of the federal statutory income tax rate to the Company’s effective tax rate is as follows:
For the Years Ended December 31,
20212020
Federal statutory income tax rate21.0 %21.0 %
State income taxes, net of federal tax effect7.0 %6.3 %
Change in uncertain tax benefits— %(0.6)%
Stock based compensation – restricted stock(1.1)%2.0 %
Return to provision adjustment1.2 %(0.7)%
Permanent differences1.9 %1.1 %
Tax credits(0.8)%(2.7)%
CARES Act carryback— %(9.4)%
Effective tax rate29.2 %17.0 %
The Company is subject to taxation in various jurisdictions. The Company’s 2018 through 2020 tax returns are subject to examination by U. S. federal authorities. The Company’s tax returns are subject to examination by various state authorities for the years 2018 and forward.
The Company had previously recorded a liability for unrecognized tax benefits (“UTBs”) related to tax positions taken on its various income tax returns in open tax periods. When recognized, a portion of the UTBs 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 UTBs that affords the Company IRS audit protection in past periods. Therefore, the total UTBs were reduced in the fourth quarter of 2020. The Company had no UTBs as of December 31, 2021 and 2020.