INCOME TAXES

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company's tax provision and the resulting effective tax rate for interim periods is determined based upon its estimated annual effective tax rate adjusted for the effect of discrete items arising in that quarter.

The Company’s provision for income taxes, which was primarily composed of state tax expense, was $1 million and $2 million for the three and nine months ended September 30, 2022, respectively, with an effective tax rate of (0.08)% and (0.19)%, respectively. The Company's provision for income taxes was less than $1 million and $1 million for the three and nine months ended September 30, 2021, respectively, with an effective tax rate of (0.58)% and (0.17)%, respectively. The effective tax rate differs from the U.S. statutory tax rate primarily due to the recording of a full valuation allowance against the net deferred tax assets.

The Company evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets. Based on the Company’s history of operating losses, including a three-year cumulative loss position, the Company believes that based on the weight of available evidence, it is more likely than not that all of the deferred tax assets will not be realized and recorded a full valuation allowance on its net deferred tax assets as of September 30, 2022 and December 31, 2021.