Income Taxes

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 14 — INCOME TAXES

The income tax provision for the three months ended March 31, 2023 was $0.1 million of deferred income tax expense in foreign jurisdictions. There was no income tax provision for the three months ended March 31, 2022.

The effective tax rate for the three months ended March 31, 2023 and 2022 was 9.1% and 0.0%, respectively. The effective income tax rate in 2023 was primarily related to income tax expense associated with tax filing jurisdictions with no associated valuation allowance and 2022 was primarily due to tax losses in these tax jurisdictions.

The Company considers the undistributed earnings of its foreign subsidiaries to be indefinitely reinvested. The undistributed earnings of foreign subsidiaries and related unrecognized deferred tax liability are not material as of March 31, 2023.The Company will continue to evaluate its plans for reinvestment or repatriation of unremitted foreign earnings. If the Company determines that all or a portion of such foreign earnings are no longer indefinitely reinvested, the Company may be subject to foreign withholding taxes and U.S. state income taxes, beyond the one-time transition tax.

As of December 31, 2022, the Company had federal net operating tax loss carryforwards of approximately $30.5 million, which may be carried forward indefinitely and are eligible to offset 80% of future taxable income. The Company also has state net operating loss carryforwards of $32.2 million with varying carryforward expiration periods ranging from 2025 to 2041. We have established a valuation allowance fully offsetting the net operating losses that the Company does not expect to be realizable in the U.S.