Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Schedule of Components of Income tax (Benefit) Expense

The components of our income taxes are as follows:


	Year Ended December 31,
(in thousands)	2023		2022		2021
Current
Federal	$	16,588	$	6,974	$	(361)
State	2,270		3,120		2,532
Total current income tax expense	18,858		10,094		2,171
Deferred
Federal	(41,856)		(421)		6,521
State	(23,706)		(76)		6,385
Total deferred income tax (benefit) expense	(65,562)		(497)		12,906
Total income tax (benefit) expense	$	(46,704)	$	9,597	$	15,077

Schedule of Reconciliation of Income Tax (Benefit) Expense

The following is a reconciliation of the U.S. federal statutory rate of 21.0% to our effective income tax rate:


	Year Ended December 31,
(dollars in thousands)	2023			2022			2021
Income taxes computed at federal statutory rate	$	(11,670)		$	(4,879)		$	(2,137)
State income taxes (1)	(16,934)			2,465			8,385
Stock-based compensation	217			383			491
Excess tax (benefits) related to stock-based compensation	6,131			4,565			(43,797)
Research and development credits, net of reserves	526			(6,401)			(8,206)
Nondeductible officers' compensation	10,641			12,295			21,905
(Decrease) increase in valuation allowance	(36,323)			68			37,782
Transaction costs	1			39			438
Basis difference on disposition	—			659			—
Nondeductible penalties	2			318			16
Other	705			85			200
Income tax (benefit) expense	$	(46,704)		$	9,597		$	15,077
Effective income tax rate	84.0		%	(41.3		%)	(148.1		%)

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(1)Includes the state tax effects for (i) excess tax (benefits) related to stock-based compensation of $1.0 million, $0.8 million and ($6.4) million for 2023, 2022 and 2021, respectively, and (ii) a valuation allowance (decrease) increase of ($13.0) million, $4.4 million and $14.6 million for 2023 and 2022, and 2021 respectively.

Schedule of Components of Net Deferred Taxes

Deferred taxes, net consist of the following:


	December 31,
(in thousands)	2023		2022
Deferred tax assets
Other assets	$	4,602	$	2,703
Operating lease liabilities	13,279		14,402
Stock-based compensation	10,804		12,542
Research and development credits, net of reserves	11,918		14,382
Tax credit carryforward	827		769
Charitable contribution carryforward	4,510		6,810
Goodwill	7,491		10,705
Capitalized research and development expenditures	14,935		9,269
Intangible assets	4,971		—
Accrued legal settlement	3,160		—
Net operating losses	10,458		8,737
Total deferred tax assets	86,955		80,319
Valuation allowance	(7,818)		(57,115)
Deferred tax assets, net of valuation allowance	79,137		23,204
Deferred tax liabilities
Other liabilities	(404)		(1,143)
Operating lease right-of-use assets, net	(7,265)		(8,815)
Property and equipment	(3,064)		(4,383)
Intangible assets	—		(9,157)
Insurance recovery receivable	(3,136)		—
Total deferred tax liabilities	(13,869)		(23,498)
Total deferred tax assets (liabilities), net	$	65,268	$	(294)

Schedule of Reconciliation of Beginning and Ending Amount of Gross Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:


(in thousands)
Gross unrecognized tax benefits at December 31, 2020	$	7,391
Increases related to prior year tax positions	999
Increases related to current year tax positions	6,911
Lapse of statute of limitations	(505)
Gross unrecognized tax benefits at December 31, 2021	14,796
Increases related to prior year tax positions	422
Increases related to current year tax positions	2,444
Decreases related to prior year tax positions	(1,160)
Lapse of statute of limitations	(1,804)
Gross unrecognized tax benefits at December 31, 2022	14,698
Increases related to prior year tax positions	409
Increases related to current year tax positions	746
Decreases related to prior year tax positions	(1,080)
Lapse of statute of limitations	(576)
Gross unrecognized tax benefits at December 31, 2023	$	14,197