INCOME TAXES

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The provision for income taxes is based on the earnings reported in the accompanying consolidated financial statements. The Company recognizes deferred income tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred income tax liabilities and assets are determined based on the cumulative temporary differences between the financial statement and tax basis of assets and liabilities using enacted tax rates expected to be applied to taxable income in years which those temporary differences are expected to be recovered or settled. Deferred income tax expense is measured by the net change in deferred income tax assets and liabilities during the year.

The foreign components of income before the provision for income taxes were not material for the years ended December 31, 2024, 2023, and 2022. The components of the provision for income taxes are as follows:

	2024		2023		2022
Currently payable:
Federal	$	73,538,314	$	85,978,954	$	62,670,986
State	4,678,030		6,242,525		4,310,783
Foreign	1,931,008		2,091,533		1,761,732
Total	80,147,352		94,313,012		68,743,501
Deferred income tax benefit:
Primarily federal	(12,421,412)		(17,735,110)		(17,777,777)
Provision for income taxes	$	67,725,940	$	76,577,902	$	50,965,724

The effective income tax rates are different from the statutory federal income tax rates for the following reasons:

	2024		2023		2022
Statutory federal income tax rate	21.0	%	21.0	%	21.0	%
State income taxes, net of federal income tax benefit	0.8		0.8		0.9
Research tax credit	(1.8)		(1.3)		(1.8)
(Decrease) Increase in reserve for uncertain tax provisions	0.2		—		(0.2)
Non-deductible executive compensation	0.3		0.1		0.3
Non-deductible expenses	0.1		0.1		0.3
Foreign tax credit	(0.3)		(0.5)		(0.3)
Foreign derived intangible income deduction	(5.9)		(5.1)		(6.2)
Stock compensation	(0.4)		(0.4)		(0.6)
Other	0.3		0.5		0.4
Effective income tax rate	14.3	%	15.2	%	13.8	%

The tax effect of temporary differences which give rise to deferred income tax assets and liabilities at    December 31, 2024 and 2023, are as follows: 

	December 31,
	2024		2023
Assets:
Accruals not currently deductible	$	11,491,033	$	10,989,677
Research and development costs	80,310,573		70,252,363
Stock based compensation	14,266,075		15,536,416
Excess tax over book depreciation	14,747,529		7,060,777
Other	5,212,157		4,025,082
Total deferred income tax assets	$	126,027,367	$	107,864,315
Liabilities:
Goodwill	$	(51,613,808)	$	(47,185,855)
Intangible assets	(16,566,494)		(15,235,639)
Other	(4,692,233)		(4,329,062)
Total deferred income tax liabilities	$	(72,872,535)	$	(66,750,556)
Net deferred income taxes	$	53,154,832	$	41,113,759

Net operating loss carryforwards with no expiration totaling $5.5 million are available to reduce future taxable earnings of certain domestic and foreign subsidiaries.

Income taxes paid in cash were approximately $86.2 million, $110.3 million, and $35.2 million in 2024, 2023 and 2022, respectively.

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

	2024		2023		2022
Beginning of year	$	4,778,000	$	4,630,000	$	5,275,000
Additions based on tax positions related to the current year	1,350,000		1,046,000		951,000
Additions for tax positions in prior years	869,000		671,000		353,000
Reductions for tax positions in prior years	—		(31,000)		(26,000)
Reductions as a result of a lapse of the applicable statute of limitations	(1,199,000)		(1,538,000)		(1,923,000)
End of year	$	5,798,000	$	4,778,000	$	4,630,000

If recognized, unrecognized tax benefits would affect the effective tax rate.

The Company recognizes interest and penalties related to unrecognized tax benefits through the provision for income taxes. The Company has accrued approximately $444,000, $365,000, and $379,000 for interest as of December 31, 2024, 2023, and 2022, respectively. Interest expensed during 2024, 2023 and 2022 was not considered significant.

The Company is also subject to periodic and routine audits in both domestic and foreign tax jurisdictions. It is reasonably possible that the amounts of unrecognized tax benefits could change as a result of an audit, new positions taken on income tax returns, settlement of tax positions and the closing of statute of limitations. It is not expected that any change will be material to the Company’s consolidated financial statements.

For the majority of tax jurisdictions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2018.