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Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company does not have operations in foreign jurisdictions. The provision (benefit) for income taxes for the years ended December 31, 2022, 2021 and 2020 are as follows:
For the Year Ended December 31,
(in thousands)202220212020
Current
Federal$104,784 $95,674 $14,602 
State and local21,763 19,628 4,096 
$126,547 $115,302 $18,698 
Deferred
Federal$(102,496)$(73,987)$(48,168)
State and local(11,882)(7,942)3,127 
(114,378)(81,929)(45,041)
Total provision (benefit) from continuing operations$12,169 $33,373 $(26,343)
The Company's provision for income taxes for the years ending December 31, 2022, 2021 and 2020 continues to be impacted by the TCJA, which was enacted into law on December 22, 2017. Income tax effects resulting from changes in tax laws are accounted for by the Company in accordance with the authoritative guidance, which requires that these tax effects be recognized in the period in which the law is enacted. During 2020 the Internal Revenue Service issued final regulations relating to the TCJA that the Company assessed and was accounted for in the period when issued. Additional changes under the CARES act in Q1 2020 increased the allowable interest expense deduction for 2019 and 2020.
The pre-tax loss during the year ended December 31, 2022 of $560.7 million generated an income tax provision of $12.2 million. The pre-tax income during the year ended December 31, 2021 was $135.5 million which generated income tax provision of $33.4 million. The pre-tax loss during the year ended December 31, 2020 of $546.9 million generated an income tax benefit of $26.3 million.
The reconciliation of the tax provision at the U.S. federal statutory rate to the provision for income taxes and the effective tax rate for the years ended December 31, 2022, 2021 and 2020 is as follows:
For the Year Ended December 31,
(in thousands)202220212020
Tax at Statutory$(117,756)$28,445 $(114,850)
Non-Deductible Expenses42 279 639 
Equity Compensation Plan575 443 85,227 
Non-Deductible change in fair value of Private Placement Warrants and Unvested Founder Shares Liability(14,080)(6,845)(7,439)
State Taxes (net)3,711 6,003 (1,741)
Valuation Allowance8 1,127 2,555 
Goodwill Impairment134,548 — — 
Non-Deductible Compensation1,033 1,561 2,725 
Tax Credits(61)(1,064)(915)
Other1 131 40 
State Deferred Rate Changes4,148 3,293 7,416 
Total$12,169 $33,373 $(26,343)
Our effective tax rate for the year ended December 31, 2022 differed from the statutory rate primarily due to non-deductible stock-based compensation expense, non-deductible mark-to-market liability, non-deductible intangible asset impairment charge, limitations on executive compensation, changes in the Company's deferred state tax rate due to previous acquisitions, tax credits, operations and state tax expense.
Our effective tax rate for the years ended December 31, 2021 and 2020 differed from the statutory rate primarily due to non-deductible stock-based compensation expense, non-deductible mark-to-market liability, limitations on executive compensation, changes in the Company’s deferred state tax rate due to the DHP acquisition, tax credits, operations and state tax expense.
The Company incurred an impairment charge of $660.3 million in the fourth quarter of 2022 which was treated for income tax purposes in accordance with ASU 2017-04. Of this impairment charge, $649.9 million resulted in an income tax expense of $136.5 million. Substantially all of the goodwill impairment charge is permanently non-deductible for income tax purposes.
The following are significant deferred income tax assets and liabilities as of December 31, 2022 and 2021:
As of December 31,
(in thousands)20222021
Deferred income tax assets:
Allowances on trade receivables$82 $82 
Net operating loss carryforwards682 934 
Capital loss carryforwards1,429 1,421 
Accrued expenses and reserves11,191 4,864 
Interest limitation carryforward77,375 57,011 
Leases – right-of-use liability6,802 7,935 
Transaction expenses6,804 7,696 
Other556 494 
Valuation allowance(1,429)(1,421)
Deferred income tax assets$103,492 $79,016 
Deferred income tax liabilities:
Intangible assets700,209 778,209 
Depreciable assets36,255 47,168 
Leases – right-of-use asset6,097 7,108 
Other429 356 
Deferred income tax liabilities742,990 832,841 
Net deferred income tax liabilities$639,498 $753,825 
The Company has NOL carry forwards for federal income tax purposes of $1.8 million, $0.4 million tax effected, that will be available to reduce future taxable income. The utilization of most of these losses is subject to annual limitations under federal income tax law. The Company believes that it will be able to fully utilize these losses under current federal tax law. The net operating losses begin to expire in 2023. The Company has net operating loss carry forwards for state income tax purposes of $0.3 million. The Company believes that it will be able to fully utilize these losses under current state tax laws. Substantially all of the Company's state NOL carryforwards expire by 2025. The Company has disallowed interest carry forwards for federal income tax purposes of $325.9 million, $77.4 million tax effected, that will be available to reduce future taxable income, subject to certain income limitations and which have an indefinite carryforward period. The Company believes it is more likely than not that these interest carryforwards will be fully utilized considering the weight of all positive and negative evidence under current tax laws.
During the third and fourth quarters of 2020, the Company marked-to-market certain investments which would result in a capital loss deferred tax asset for which the Company recorded a corresponding valuation allowance. As of December 31, 2022, the Company kept the valuation allowance related to the remaining estimated capital losses in excess of capital gain based on the difference between the tax and book balance of these investments. It is more likely than not the Company will not generate capital gain income to offset these losses.
The Company does not have reserves for uncertain tax positions. Any need for a reserve or changes in a reserve would be a component of the Company's tax provision. The Company includes interest and tax penalties as part of the tax provision. The Company does not reasonably expect any other significant changes in the next twelve months.
Various regulatory tax authorities periodically examine the Company's and its subsidiaries' tax returns. Tax years December 2019 through 2022 are open for Federal examination. Tax years 2018 through 2022 are still open for examination related to income taxes to various state taxing authorities.