INCOME TAXES

3 Months Ended

Mar. 31, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

12. INCOME TAXES

During the three months ended March 31, 2024, the Company recorded an income tax provision of $5.3 million, representing an effective tax rate of 14.2%. The Company continues to maintain a valuation allowance on its worldwide deferred tax assets with the exception of deferred tax assets in certain foreign jurisdictions, as it has concluded that it is more likely than not that these deferred tax assets will not be realized. The effective tax rate for the three months ended March 31, 2024 was less than the statutory tax rate of 21%, principally due to the release of valuation allowance against certain tax attribute carryforwards utilized to offset current year income.

During the three months ended March 31, 2023, the Company recorded an income tax provision of $4.0 million, representing an effective tax rate of (0.8%). For tax years beginning on or after January 1, 2022, the Tax Cuts and Jobs Act of 2017 eliminates the option to currently deduct research and development expenses and requires taxpayers to capitalize and amortize the costs over five years for research activities performed in the U.S. and 15 years for research activities performed outside the U.S. The requirement to capitalize research and development costs for tax purposes resulted in the Company having taxable profits and recording federal and state tax expense of $0.9 million and $3.1 million, respectively. The state tax expense of $3.1 million is primarily related to state taxable income, partially offset by net operating loss carryforwards.