Income Taxes

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The tax provision or benefit from income taxes for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter the Company updates our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment.

The quarterly tax provision, and the quarterly estimate of our annual effective tax rate, is subject to significant variation due to several factors, including variability in accurately predicting the pre-tax and taxable income and loss, changes in how the Company does business, audit developments, changes in law, regulations, and administrative practices, and relative changes of expenses or losses for which tax benefits are not recognized. Additionally, the effective tax rate can be more or less volatile based on the amount of pre-tax net loss.

As of September 30, 2023, the effective income tax rate was significantly lower then the statutory rate due to the impact of recording Goodwill & Intangible asset impairment, and the valuation allowance maintained against the Company's deferred tax assets. The effective tax rate is 0.28% and 1.35%, respectively, for the three and nine months ended September 30, 2023 based on the loss before income tax in the Statement of Operations. This compares to the rate of 3.96% and 5.26%, respectively, for the three and nine months ended September 30, 2022.