Note 16 - Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Taxes

Note 16- Taxes

The income tax benefit consisted of the following for the years ended December 31, 2023 and 2022:

	For the Year Ended December 31,
(in thousands)	2023			2022
Current:
Federal	$	251		$	—
State		89			—
Total current tax expense		340			—
Deferred:
Federal	$	(2,853	)	$	(4,214	)
State		(1,115	)		(1,643	)
Total deferred tax benefit		(3,968	)		(5,857	)
Total income tax benefit	$	(3,628	)	$	(5,857	)

The Company’s effective income tax rate for the years ended December 31, 2023 and 2022 reconciles with the federal statutory rate as follows:

	For the Year Ended December 31,
	2023			2022
Federal statutory rate		21.0	%		21.0	%
Permanent items		(0.2	)%		0.0	%
State income taxes, net of federal tax benefit		5.4	%		6.0	%
Change in valuation allowance		(12.0	)%		—
Other		—			(1.0	)%
Rate change		0.3	%		—
Prior year adjustment		—			1.7	%
Effective income tax rate on income before taxes		14.5	%		27.7	%

The difference between the Company’s effective tax rate and federal statutory rate for the years ended December 31, 2023 and 2022 is (6.5)% and 6.7%, respectively, which is primarily due to the change in valuation allowance, state taxes and permanent items.

Deferred income tax assets (liabilities) are comprised of the following as of December 31, 2023 and 2022:

	For the Year Ended December 31,
(in thousands)	2023			2022
Deferred tax assets
NOL carryforwards	$	5,197		$	6,646
Valuation allowance		(3,001	)		—
Equity compensation		678			461
Other		5			3
Total deferred tax assets	$	2,879		$	7,110
Deferred tax liabilities
Investment in the Operating Partnership	$	(2,879	)	$	(11,078	)
Total deferred tax liabilities	$	(2,879	)	$	(11,078	)
Net deferred tax assets (liabilities)	$	—		$	(3,968	)

At December 31, 2023 and 2022, the Company had pre-tax federal and state income tax NOL carryforwards of approximately $19.6 million and $24.6 million, respectively, which will carry forward indefinitely for federal purposes and for most states. As of December 31, 2023, the Company maintained a full valuation allowance on its deferred tax assets as the timing of the utilization of its net operating losses is uncertain. For the year ended December 31, 2023, the Company recorded a valuation allowance of $3.0 million against the deferred tax assets.

The Company had no uncertain tax positions as of December 31, 2023 and 2022. Generally, for federal and state purposes, the Company's 2020 through 2023 tax years remain open for examination by tax authorities. Additionally, any net operating losses that were generated in prior years and utilized in these years may also be subject to examination by the Internal Revenue Service. The Company’s policy is to recognize interest and penalties associated with uncertain tax positions as part of income tax expense.