INCOME TAXES |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Notes to Financial Statements | |
| INCOME TAXES |
NOTE 9 — INCOME TAXES The Company records income taxes for interim periods based on an estimated annual effective tax rate. The estimated annual effective rate is recomputed on a quarterly basis and may fluctuate due to changes in forecasted annual operating income, positive or negative changes to the valuation allowance for net deferred tax assets and changes to actual or forecasted permanent book to tax differences. The Company’s effective tax rate for the three and six months ended June 30, 2024 was 23.1% and 11.8%, respectively. The difference between the effective tax rate and the federal statutory rate was primarily due to the impact of nondeductible compensation and adjustments to the valuation allowance. The Company’s effective tax rate for the three months ended June 30, 2023 is not meaningful primarily as a result of changes in the valuation allowance on the Company’s deferred tax assets. The Company’s effective tax rate for the six months ended June 30, 2023 was 45.6%. The difference between the effective tax rate and the federal statutory rate was primarily due to the impact of state income taxes, nondeductible compensation, and adjustments to the valuation allowance. As of June 30, 2024 and December 31, 2023, the Company had a valuation allowance of $27.1 million and $23.2 million, respectively, primarily related to state net operating losses and the disallowed interest expense limitation carryover. At each reporting date, the Company considers all available positive and negative evidence to evaluate whether its deferred tax assets are more likely than not to be realized. |