Income Taxes

3 Months Ended

Mar. 31, 2022

Income Taxes

Income Taxes

11. Income Taxes

During the three months ended March 31, 2022, the Company recognized an income tax expense of $3,718 on pre-tax income of $9,720, compared to income tax expense of $1,360 on pre-tax income of $3,770 for the prior year period.

For the three months ended March 31, 2022 and 2021, the effective tax rate differs from the U.S. federal statutory income tax rate as follows:

	March 31,
	2022		2021
Tax at federal statutory rate	21.0	%	21.0	%
State taxes, net	8.9		11.8
Valuation allowance	6.3		—
Permanent items	1.7		3.9
Other	0.3		(0.6)
Effective income tax rate	38.2	%	36.1	%

The net change in the valuation allowance during the three months ended March 31, 2022 was an increase of $611. The change was fully comprised of an increase due to the more restrictive interest deduction limitation in Section 163(j) of the Internal Revenue Code that took effect in 2022.