Income Taxes

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income TaxesREP LLC was organized as a limited liability company and treated as a flow-through entity for federal income tax purposes. As such, taxable income and any related tax credits were passed through to its members and included in their tax returns, even though such taxable income or tax credits may not have been distributed. In connection with the closing of the Merger, the Company's tax status changed from a limited liability company to a C-corporation. As a result, the Company is responsible for federal and state income taxes and must record deferred tax assets and liabilities for the tax effects of any temporary differences that exist.

The components of the Company's consolidated provision for income taxes from continuing operations are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(In thousands)
Current income tax expense:
Federal	$	142	$	2	$	1,442	$	2
State	291		284		486		52
Total current income tax expense	433		286		1,928		54
Deferred income tax expense (benefit):
Federal	15,460		(6,427)		22,439		14,202
State	424		2,204		763		(717)
Total deferred income tax expense (benefit)	15,884		(4,223)		23,202		13,485
Total income tax expense (benefit)	$	16,317	$	(3,937)	$	25,130	$	13,539

A reconciliation of the statutory federal income tax rate to the Company's effective income tax rate is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Tax at statutory rate	21.0	%	21.0	%	21.0	%	21.0	%
Nondeductible compensation	0.1	%	(32.1)	%	0.2	%	(1.3)	%
Transaction costs	—	%	(47.7)	%	—	%	(2.1)	%
Stock compensation	—	%	0.2	%	(0.1)	%	(0.1)	%
State income taxes, net of federal benefit	0.8	%	22.9	%	0.8	%	(1.6)	%
Change in tax status	—	%	(0.5)	%	—	%	(53.4)	%
Income subject to taxation by REP LLC's unitholders	—	%	—	%	—	%	(15.8)	%
Other	(0.5)	%	—	%	(0.3)	%	—	%
Effective income tax rate	21.4	%	(36.2)	%	21.6	%	(53.3)	%

The Company's federal income tax returns for the years subsequent to December 31, 2018 remain subject to examination. The Company's income tax returns in major state income tax jurisdictions remain subject to examination for various periods subsequent to December 31, 2017. The Company currently believes that all other significant filing positions are highly certain and that all of its other significant income tax positions and deductions would be sustained under audit or the final resolution would not have a material effect on the consolidated financial statements. Therefore, the Company has not established any significant reserves for uncertain tax positions.