Income Taxes

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

11. Income Taxes

During the three months ended March 31, 2022 and 2021, the Company recorded an income tax provision of $3.6 million and a provision of $0.6 million, respectively, representing an effective tax rate of -2.1% and -0.5%, respectively. The income tax provision is primarily attributable to the year-to-date pre-tax income earned by the Company’s U.S. subsidiary. The decrease in the rate for the three months ended March 31, 2022 is primarily attributable to the requirement to capitalize research and development costs for tax purposes under the 2017 “Tax Cuts and Jobs Act” (TCJA) which impacts the Company's permanent tax adjustments and the Company's valuation allowance assessment. The difference in the statutory tax rate and effective tax rate is primarily a result of the jurisdictional mix of earnings, research credits generated, and the valuation allowance recorded against certain deferred tax assets. The Company maintains a valuation allowance against certain deferred tax assets that are not more-likely-than-not realizable.