INCOME TAXES

9 Months Ended

Sep. 30, 2019

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

In general, the Company is required to use an estimated annual effective tax rate ("AETR") to measure the income tax expense or benefit recognized on a year to date basis in an interim period. In addition, certain items included in income tax expense as well as the tax impact of certain items included in pretax income must be treated as discrete items. The income tax expense or benefit associated with these discrete items is fully recognized in the interim period in which the items occur.

For the three and nine months ended September 30, 2019, the Company recorded income tax expense of $37,871 and $56,445 on pre-tax income of $115,267 and $195,053, respectively, resulting in an effective tax rate of 33% and 29%, respectively, which are higher than the U.S. federal statutory tax rate of 21%. The primary differences between the effective tax rate and the statutory tax rate are due to a revaluation of state deferred taxes primarily due to certain changes to the state tax rates used to measure the Company’s deferred tax liabilities and certain non-deductible expenses. 

For the three and nine months ended September 30, 2018, the Company recorded income tax expense of $95,968 and $29,675 on pre-tax income (loss) of $129,707 and ($163,539) for the three and nine months ended September 30, 2018, respectively.  Included in the income tax expense for each period was tax expense of $49,052 as a result of the reevaluation of the Company's deferred tax liability in connection with tax law changes in the State of New Jersey. Absent, this item, the effective tax rate for the three months ended September 30, 2018 would have been 36%. For the nine months ended

September 30, 2018, the tax benefit at the statutory rate was more than offset by the expense resulting from the tax law changes in the State of New Jersey of $49,052.