Income Taxes

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

The Inflation Reduction Act (IRA) was enacted on August 16, 2022 to address the high cost of prescription drugs, healthcare availability, climate change and inflation. The IRA extended the energy efficient homes credit through 2032 and, as a result, the Company recognized a $3.1 million year-to-date tax benefit for energy efficient homes credit during the first nine months of 2023. The Company recognized an $8.4 million tax benefit for energy efficient homes credit in 2022’s first nine months.

During the three months ended September 30, 2023 and 2022, the Company recorded a tax provision of $38.9 million and $35.0 million, respectively, which reflects income tax expense related to income before income taxes for the periods. The effective tax rate for the three months ended September 30, 2023 and 2022 was 21.9% and 21.0%, respectively. The increase in the effective rate from the three months ended September 30, 2022 was primarily attributable to the $6.2 million decrease in tax benefit from energy efficient home credits for 2023, offset by a $3.0 million increase in tax benefit from equity compensation and a $1.6 million decrease in tax expense from permanent adjustments for 2023.

During the nine months ended September 30, 2023 and 2022, the Company recorded a tax provision of $109.2 million and $110.8 million, respectively. The effective tax rate for the nine months ended September 30, 2023 and 2022 was 23.3% and 23.5%, respectively. The decrease in the effective rate from the nine months ended September 30, 2022 was primarily

attributable to a $5.3 million decrease in tax benefit from energy efficient home credits for 2023, offset by a $4.6 million increase in tax benefit from equity compensation and a $1.3 million decrease in tax expense from permanent adjustments for 2023.