INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2022

INCOME TAXES [ABSTRACT]

Sources of Pre-Tax Accounting Income

The sources of pre-tax operating income are as follows (in thousands):

	Year Ended December 31,
	2022		2021		2020
Domestic	$	52,887	$	108,160	$	129,620
Foreign		91,561		99,724		40,648
Total	$	144,448	$	207,884	$	170,268

Components of Income Tax Expense (Benefit)

The components of the Company’s Provision for (benefit from) income taxes are as follows (in thousands):

	Year Ended December 31,
	2022		2021		2020
Current provision for (benefit from)
Federal	$	10,816	$	20,697	$	22,763
State		5,245		8,006		9,871
Foreign		22,055		20,161		13,496
Total current provision for (benefit from)		38,116		48,864		46,130
Deferred provision for (benefit from)
Federal		(3,128)		(7,017)		(2,390)
State		(192)		(402)		(254)
Foreign		(7,681)		8,250		(2,549)
Total deferred provision for (benefit from)		(11,001)		831		(5,193)
Total provision for (benefit from) income taxes	$	27,115	$	49,695	$	40,937

Effective Income Tax Rate Reconciliation Table

The following reconciles the Company’s effective tax rate to the federal statutory rate (in thousands):

	Year Ended December 31,
	2022		2021		2020
Income tax per U.S. federal statutory rate (21%, 21%, 21%)	$	30,334	$	43,655	$	35,756
State income taxes, net of federal deduction		2,717		4,588		6,923
Change in valuation allowances		(3,278)		12,567		3,903
Foreign income taxes at different rates than the U.S.		1,202		(1,416)		(783)
Foreign withholding taxes		(2)		(93)		106
Losses in international markets without tax benefits		—		—		(1,656)
Nondeductible compensation under Section 162(m)		841		1,494		656
Taxes related to equity compensation		(907)		(4,282)		(587)
Liabilities for uncertain tax positions		(1,435)		(790)		2,882
Permanent difference related to foreign exchange gains		139		3,362		(71)
Impacts of foreign branch operations		2,315		(187)		(10)
Non-taxable earnings of noncontrolling interest		(2,638)		(3,085)		(1,964)
Foreign dividend less foreign tax credits		(1,616)		(1,142)		(1,723)
Decrease (increase) to deferred tax asset - change in tax rate		—		—		(48)
State and Federal income tax credits and NOL's		(4,604)		(4,531)		(3,918)
Foreign earnings taxed currently in U.S.		2,978		1,930		1,936
Taxes related to prior year filings		(432)		(1,192)		(1,718)
Taxes related to acquisition accounting		—		—		1,317
Other		1,501		(1,183)		(64)
Income tax per effective tax rate	$	27,115	$	49,695	$	40,937
Effective tax rate percentage		18.8%		23.9%		24.0%

Schedule of Deferred Tax Assets and Liabilities

The Company’s deferred income tax assets and liabilities are summarized as follows (in thousands):

	Year Ended December 31,
	2022		2021
Deferred tax assets, gross
Accrued workers compensation, deferred compensation and employee benefits	$	9,715	$	8,441
Allowance for credit losses, insurance and other accruals		4,109		4,767
Amortization of deferred lease liabilities		18,475		15,816
Net operating losses		18,312		18,006
Equity compensation		1,912		2,302
Customer acquisition and deferred revenue accruals		18,749		20,069
Federal and state tax credits, net		3,247		2,759
Unrealized losses on derivatives		—		22
Impairment of equity investment		1,047		4,064
Depreciation and amortization		7,896		—
Partnership Investment		102		106
Other		3,931		5,052
Total deferred tax assets, gross		87,495		81,404
Valuation allowances		(24,944)		(29,620)
Total deferred tax assets, net		62,551		51,784
Deferred tax liabilities
Depreciation and amortization		—		(10,291)
Unrealized gain on derivatives		(27)		—
Contract acquisition costs		(19)		(1,831)
Intangible assets		(28,848)		(21,202)
Operating lease assets		(15,594)		(12,481)
Other		(3,208)		(184)
Total deferred tax liabilities		(47,696)		(45,989)
Net deferred tax assets	$	14,855	$	5,795

Valuation Allowance Rollforward

Activity in the Company’s valuation allowance accounts consists of the following (in thousands):

	Year Ended December 31,
	2022		2021		2020
Beginning balance	$	29,620	$	18,697	$	17,051
Additions of deferred income tax expense		2,248		14,660		4,650
Reductions of deferred income tax expense		(6,924)		(3,737)		(3,004)
Ending balance	$	24,944	$	29,620	$	18,697

Expiration of Net Operating Loss Carryforwards

As of December 31, 2022, after consideration of all tax loss carry back opportunities, the Company had tax affected tax loss carry forwards worldwide expiring as follows (in thousands):

2023	$	12
2024		9
2025		47
2026		50
After 2026		7,624
No expiration		10,570
Total	$	18,312

Reserve for Uncertain Tax Positions Rollforward

The tabular reconciliation of the reserve for uncertain tax benefits on a gross basis without interest for the three years ended December 31, 2022 is presented below (in thousands):

Balance as of December 31, 2019	$	4,784
Additions for current year tax positions		2,725
Reductions in prior year tax positions		—
Balance as of December 31, 2020		7,509
Additions for current year tax positions		220
Reductions in prior year tax positions		(826)
Balance as of December 31, 2021		6,903
Additions for current year tax positions		143
Reductions in prior year tax positions		(479)
Balance as of December 31, 2022	$	6,567

Jurisdictions Open to Income Tax Examination

Tax Jurisdiction	Tax Year Ended
United States	2017 to Present
Australia	2018 - Present
India	2017 - Present
Canada	2018 - Present
Mexico	2017 - Present
Philippines	2018 - Present