INCOME TAXES

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

A reconciliation between the income tax provision at the U.S. statutory tax rate and the Company’s income tax provision on the condensed consolidated statements of income and comprehensive income is below (in thousands, except for tax rates):

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Income before income taxes	$	22,091		$	22,095		$	38,739		$	38,254
U.S statutory tax rate	21		%	21		%	21		%	21		%
Income tax expense at statutory rate	4,639			4,640			8,135			8,033
State tax expense, net of federal benefit	1,741			1,369			3,055			2,353
Foreign tax rates different from U.S. statutory rate	(5)			34			43			45
Non-deductible expenses	283			220			508			357
Stock compensation	(67)			(41)			(274)			(61)
Other	78			(111)			88			(111)
Total income tax provision	$	6,669		$	6,111		$	11,555		$	10,616

Effective income tax rates for interim periods are based upon our current estimated annual rate. The Company’s effective income tax rate varies based upon an estimate of taxable earnings as well as on the mix of taxable earnings in the various states and countries in which we operate. Changes in the annual allocation and apportionment of the Company’s activity among these jurisdictions results in changes to the effective rate utilized to measure the Company’s deferred tax assets and liabilities.

Our income tax provision includes the expected benefit of all deferred tax assets, including our net operating loss carryforwards. With few exceptions, our U.S federal and state net operating loss carryforwards will expire from 2039 through 2042 and our foreign net operating losses will not expire. After consideration of all evidence, both positive and negative, management has determined that no valuation allowance is required at June 30, 2023 on the Company’s U.S. federal or state deferred tax assets; however, a valuation allowance has been recorded at June 30, 2023 on deferred tax assets associated with Canadian, Spanish, Italian, German and Dutch net operating loss carryforwards. Utilization of the Company's net operating loss carryforwards is subject to limitation under Internal Revenue Code Section 382 and similar tax provisions in the foreign jurisdictions in which we operate.

As presented in the income tax reconciliation above, the tax provision recognized on the condensed consolidated statements of income and comprehensive income was impacted by state taxes, non-deductible officer compensation and share-based compensation tax benefits, and foreign tax rates applicable to the Company’s foreign subsidiaries that are higher or lower than the U.S. statutory rate. Our effective state tax rate for the three and six months ended June 30, 2023 was higher than our effective state tax rate for the three and six ended June 30, 2022. The increase in our effective state tax rate is primarily a result of revenue from La Nacional earned during the three and six months ended June 30, 2023 which is sourced to states with relatively higher tax rates and from increases in non-deductible officer expenses.