Income Taxes

9 Months Ended

Sep. 30, 2024

Income Taxes

Income Taxes

9. Income Taxes

The Company’s effective tax rates on pre-tax income were (57.9)% and 37.7% for the three months ended September 30, 2024 and 2023, respectively, and 24.0% and 30.5% for the nine months ended September 30, 2024 and 2023, respectively. The benefit recognized for the three months ended September 30, 2024 and the decrease in the effective tax rate for the nine months ended September 30, 2024 related to increased deductibility of stock compensation realized upon certain stock option exercises and restricted stock unit vesting. The effective tax rate for the three and nine months ended September 30, 2023 was impacted by the limitation of executive compensation deductibility related to the former CEO’s retention agreement.

For the nine months ended September 30, 2024 and 2023, the effective tax rate differs from the U.S. federal statutory income tax rate as follows:

	September 30,
	2024		2023
Tax at federal statutory rate	21.0	%	21.0	%
State taxes, net	5.6		5.3
Valuation allowance	—		(1.1)
Permanent items (1)	2.1		6.0
Other (2)	(4.7)		(0.7)
Effective income tax rate	24.0	%	30.5	%

(1) Includes the deductibility limitations on excess compensation.

(2) The 2024 amount primarily relates to increased deductibility of stock compensation realized upon certain stock option exercises and restricted stock unit vesting.