INCOME TAXES |
9 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Notes to Financial Statements | |
| INCOME TAXES |
NOTE 10 — 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 nine months ended September 30, 2024 was 11.0% and 11.3%, respectively. These effective tax rates differ from the federal statutory rate primarily due to the impact of nondeductible compensation and adjustments to the Company’s valuation allowance. The Company’s effective tax rate for the three months ended September 30, 2023 was not meaningful primarily as a result of changes in the valuation allowance against the Company’s deferred tax assets. The Company’s effective tax rate for the nine months ended September 30, 2023 was 50.6%. The effective tax rate differed from the federal statutory rate was primarily due to the impact of state income taxes, nondeductible compensation, and adjustments to the Company’s valuation allowance. As of September 30, 2024 and December 31, 2023, the Company had a valuation allowance of $29.0 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. |