Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Deferred tax assets and liabilities as of December 31 are as follows:

	2024		2023
Deferred income tax assets:	(in thousands)
Allowance for credit losses	$	501	$	672
Accrued expenses	4,373		4,964
Stock-based compensation	187		120
Insurance accruals	14,153		12,869
State net operating loss carryforward	865		94
Indirect tax benefits of unrecognized tax benefits	1,091		1,160
Other	—		2
Total gross deferred tax assets	21,170		19,881
Less valuation allowance	—		—
Net deferred tax assets	21,170		19,881
Deferred income tax liabilities:
Property and equipment	(137,019)		(167,911)
Goodwill and amortizable intangibles	(38,621)		(36,048)
Prepaid expenses	(2,958)		(3,549)
Total gross deferred tax liability	(178,598)		(207,508)
Net deferred tax liabilities	$	(157,428)	$	(187,627)

The deferred tax amounts above have been classified in the accompanying consolidated balance sheets at December 31, 2024 and 2023 as follows:

	2024		2023
	(in thousands)
Noncurrent assets, net	$	946	$	1,494
Long-term liabilities, net	(158,374)		(189,121)
	$	(157,428)	$	(187,627)

We have not recorded a valuation allowance against any deferred tax assets at December 31, 2024 and 2023.  In management’s opinion, it is more likely than not that we will be able to utilize these deferred tax assets in future periods as a result of our history of profitability, taxable income, and reversal of deferred tax liabilities.

Income tax expense consists of the following:

	2024		2023		2022
	(in thousands)
Current income taxes:
Federal	$	19,790	$	19,020	$	31,951
State	3,513		3,543		9,657
Foreign	(57)		596		195
	23,246		23,159		41,803
Deferred income taxes:
Federal	(27,078)		(14,500)		3,717
State	(3,669)		(3,311)		2,005
Foreign	548		(270)		(18)
	(30,199)		(18,081)		5,704
Total	$	(6,953)	$	5,078	$	47,507

The income tax provision differs from the amount determined by applying the U.S. federal tax rate as follows:

	2024		2023		2022
	(in thousands)
Federal tax at statutory rate (21%)	$	(7,702)	$	4,169	$	38,029
State taxes, net of federal benefit	(403)		708		9,711
Permanent differences to return	1,758		1,740		449
Return to provision adjustment	(719)		(1,482)		(203)
Uncertain income tax penalties and interest, net	25		(152)		(226)
Foreign Rate Differential	130		154		58
Other	(42)		(59)		(311)
	$	(6,953)	$	5,078	$	47,507

At December 31, 2024 and December 31, 2023, we had a total of $5.2 million and $5.5 million in gross unrecognized tax benefits, respectively, included in long-term income taxes payable in the consolidated balance sheets. Of this amount, $4.1 million and $4.4 million represents the amount of unrecognized tax benefits that, if recognized, would impact our effective tax rate as of December 31, 2024 and December 31, 2023, respectively. Unrecognized tax benefits were a net decrease of $0.3 million and a net decrease of $0.2 million during the years ended December 31, 2024 and 2023, respectively. The increased reduction in 2024 associated with unrecognized tax benefits is primarily due to a reduction in additions following pre-tax income. This had the effect of decreasing the effective rate in 2024. The total net amount of accrued interest and penalties for such unrecognized tax benefits was $1.0 million and $0.7 million at December 31, 2024 and December 31, 2023, respectively, and is included in long-term income taxes payable in the consolidated balance sheets. Net interest and penalties included in income tax expense for the years ended December 31, 2024, 2023 and 2022 was an expense of $0.3 million, approximately zero, and $0.1 million, respectively. Income tax expense is increased each period for the accrual of interest on outstanding positions and penalties when the uncertain tax position is initially recorded. Income tax expense is reduced in periods by the amount of accrued interest and penalties associated with reversed uncertain tax positions due to lapse of applicable statute of limitations, when applicable or when a position is settled. Income tax expense was reduced during the years ended December 31, 2024, 2023 and 2022 due to reversals of interest and penalties due to lapse of applicable statute of limitations and settlements, net of additions for interest and penalty accruals during the same period. These unrecognized tax benefits relate to risks associated with state income tax filing positions for our corporate subsidiaries.

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

	2024		2023
	(in thousands)
Balance at January 1,	$	5,522	$	5,744
Additions based on tax positions related to current year	37		345
Reductions for tax positions of prior years	—		(176)
Reductions due to lapse of applicable statute of limitations	(362)		(391)
Balance at December 31,	$	5,197	$	5,522

A number of years may elapse before an uncertain tax position is audited and ultimately settled. It is difficult to predict the ultimate outcome or the timing of resolution for uncertain tax positions. It is reasonably possible that the amount of unrecognized tax benefits could significantly increase or decrease within the next twelve months. These changes could result from the expiration of the statute of limitations, examinations or other unforeseen circumstances. We do not have any outstanding litigation related to tax matters. At this time, management’s best estimate of the reasonably possible change in the amount of gross unrecognized tax benefits is approximately no change to an increase of $1.0 million during the next twelve months, due to the combination of expiration of certain statute of limitations and estimated additions. The federal statute of limitations remains open for the years 2021 and forward. Tax years 2014 and forward are subject to audit by state tax authorities depending on the tax code and administrative practice of each state.