INCOME TAXES

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The income tax expense (benefit) consists of the following for the years ended December 31, 2022, 2021 and 2020 (in thousands):

	Year Ended December 31,
	2022		2021		2020
US federal income tax expense (benefit):
Current	$	4,103	$	—	$	(69)
Deferred	38,810		(30,411)		996
	42,913		(30,411)		927
State income tax expense:
Current	9,182		6,817		1,707
Deferred	3,117		190		199
	12,299		7,007		1,906
Total income tax expense (benefit)	$	55,212	$	(23,404)	$	2,833

The difference between the statutory federal income tax rate and the effective tax rate is as follows for the years ended December 31, 2022, 2021 and 2020:

	Year Ended December 31,
	2022		2021		2020
US federal statutory tax rate	21.0	%	21.0	%	21.0	%
State and local income taxes net of federal tax benefit	5.0	%	4.9	%	(29.5)	%
Valuation allowance	0.0	%	(46.2)	%	(29.9)	%
Stock-based compensation	0.0	%	(0.1)	%	6.7	%
Non-deductible compensation	0.4	%	0.1	%	(16.3)	%
Non-deductible expenses	0.2	%	0.3	%	(8.2)	%
Other, net	0.2	%	(0.1)	%	2.2	%
Effective income tax rate	26.8	%	(20.1)	%	(54.0)	%

The Company recorded income tax expense of $55.2 million and income tax benefit of $23.4 million, which represents an effective tax rate of 26.8% and negative 20.1% for the years ended December 31, 2022 and 2021, respectively. The variance in the Company’s effective tax rate of 26.8% and negative 20.1% is primarily attributable to the release of the Company’s federal valuation allowance for the year ended December 31, 2021. The variance in the Company’s effective tax rate of 26.8% for the year ended December 31, 2022 compared to the federal statutory rate of 21% is primarily attributable to the difference between federal and state tax rates, as well as various non-deductible expenses.

The components of deferred income tax assets and liabilities using the 21% U.S. Federal statutory tax rate were as follows as of December 31, 2022 and 2021 (in thousands):

	December 31, 2022		December 31, 2021
Deferred tax assets:
Price concessions	$	6,169	$	6,373
Compensation and benefits	5,517		5,889
Interest limitation carryforward	29,453		35,114
Operating lease liability	22,765		23,266
Net operating losses	62,027		97,880
Other	6,576		6,381
Deferred tax assets before valuation allowance	132,507		174,903
Valuation allowance	(13,056)		(13,151)
Deferred tax assets net of valuation allowance	119,451		161,752
Deferred tax liabilities:
Accelerated depreciation	(7,026)		(10,602)
Operating lease right-of-use asset	(18,076)		(18,437)
Intangible assets	(57,673)		(61,629)
Goodwill	(44,949)		(36,702)
Other	(13,881)		(7,349)
Deferred tax liabilities	(141,605)		(134,719)
Net deferred tax (liabilities) assets	$	(22,154)	$	27,033

Deferred tax assets are generally required to be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. For the year ended December 31, 2022, the Company maintains a valuation allowance of $13.1 million against certain state net operating losses. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some or all the deferred tax assets will not be realized. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which those temporary differences are deductible. The Company considers the scheduled reversal of deferred tax liabilities, including the effect in available carryback and carryforward periods, projected taxable income and tax-planning strategies, in making this assessment. On a quarterly basis, the Company evaluates all positive and negative evidence in determining if the valuation allowance is fairly stated.

The Company is subject to taxation in the United States and various states. At December 31, 2022, the Company had $201.3 million of gross federal NOL carryforwards all of which are currently available to offset future taxable income in the United States and reflected as a deferred tax asset of the company. Gross federal NOL carryforwards of $144.9 million expire beginning in 2027 through 2036 and $56.4 million have an indefinite carryforward period. At December 31, 2021, the Company had $358.4 million of gross federal NOL’s. At December 31, 2022 and 2021, the Company had $118.1 million and $140.2 million of interest limitation carryforwards which have an indefinite carryforward period. At December 31, 2022 and 2021, the Company also had $349.5 million and $405.1 million of cumulative gross state NOL carryforwards available to offset future taxable income in various states. These state NOL carryforwards will begin to expire beginning in 2023 through 2041, with some having an indefinite carryforward period.

At December 31, 2022 and 2021, the unrecognized tax benefits for uncertain tax positions was $0.

The following table presents the valuation allowance for deferred tax assets for the years ended December 31, 2022, 2021 and 2020 (in thousands):

			Additions
Description	Balance at Beginning of Period		Charged (Benefit) to Costs and Expenses		Charged (Benefit) to Other Accounts		Balance at End Period
2020: Valuation allowance for deferred tax assets	$	109,531	$	1,549	$	1,005	$	112,085
2021: Valuation allowance for deferred tax assets	$	112,085	$	(96,136)	$	(2,798)	$	13,151
2022: Valuation allowance for deferred tax assets	$	13,151	$	(95)	$	—	$	13,056

Currently, the Company is not subject to any U.S. Federal income tax audits. The Company is subject to various state tax audits, and believes that the outcome of these audits will not have a material impact on the Company.