INCOME TAXES

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

As of September 30, 2023, the Company’s net deferred tax assets are expected to be fully offset by a valuation allowance for the year ending December 31, 2023. The valuation allowance is determined in accordance with the provisions of ASC 740, Income Taxes, which require an assessment of both negative and positive evidence when measuring the need for a valuation allowance. The exact timing and amount of the valuation allowance releases are subject to change based on the level of profitability achieved in future periods. The Company continues to assess the realizability of its deferred tax assets on a quarterly basis. As part of its valuation allowance assessment as of September 30, 2023, the Company was no longer able to rely on its projected availability of future taxable income from pre-tax income forecasts. As such, the Company primarily relied on its reversing taxable temporary differences to assess its valuation allowance, which resulted in the recording of the full valuation allowance during the three months ended September 30, 2023. If it is determined that a portion or all of the valuation allowance is not required, it will generally be a benefit to the income tax provision in the period such determination is made.

For the three and nine months ended September 30, 2023, the Company recorded an income tax expense of $50.7 million and $52.4 million, respectively. The difference between the income tax expense in each period and the tax at the federal statutory rate of 21.0% on current year operations is principally due to the impact of the valuation allowance, offset by state taxes, disallowed officer’s compensation, and capital expenses.

The Company files income tax returns in the United States federal jurisdiction and in various states. The statutes of limitations for the Company's tax returns filed for the years 2007 through 2021 have not expired. Because of net operating losses and unutilized research and development credits, substantially all of the Company’s tax years remain open to examination. Interest and penalties, if any, related to unrecognized tax benefits, would be recognized as income tax expense by the Company. As of September 30, 2023, the Company did not have significant accrued interest and penalties associated with unrecognized tax benefits.