Income Taxes

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company recorded income tax expense of $44 for the three months ended March 31, 2023, as compared to income tax expense of $180 for the three months ended March 31, 2022. The decrease of $136, in income tax expense is primarily related to the corresponding increase in the valuation allowance for TOI. The Company's effective tax rate decreased to (0.15)% for the three months ended March 31, 2023, from 0.92% for the three months ended March 31, 2022..

The Company's effective tax rate for the three months ended March 31, 2023, was different than the U.S. federal statutory tax rate of 21.00%, primarily due to the increased valuation allowance, partially offset by the tax effect of the change in fair market value of the warrant, earn out, and derivative liabilities, non-deductible transaction costs, as well as the Section 162(m) limitation on compensation for covered employees and Section 163(l) limitation on interest expense related to the convertible note, which are not taxable for federal income tax purposes.