Income Taxes

9 Months Ended

Sep. 30, 2022

Income Taxes

Income Taxes

11. Income Taxes

The Company’s effective tax rates on pre-tax income were 25.8% and 30.3% for the three months ended September 30, 2022 and 2021, respectively, and 28.5% and 30.7% for the nine months ended September 2022 and 2021, respectively. The decrease in the Company’s effective tax rate for the three and nine months compared to the corresponding periods in the prior year was primarily due to a greater proportion of pre-tax income in relation to the impact of permanent items. The effective tax rate for the three months ended September 30, 2022 also decreased as a result of the release of a federal valuation allowance for increased deductibility of interest costs due to a tax election made in the current year.

For the nine months ended September 30, 2022 and 2021, the effective tax rate differs from the U.S. federal statutory income tax rate as follows:

	September 30,
	2022		2021
Tax at federal statutory rate	21.0	%	21.0	%
State taxes, net	5.5		6.2
Valuation allowance	—		—
Permanent items	1.3		2.8
Other	0.7		0.7
Effective income tax rate	28.5	%	30.7	%