Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income tax expense for the Company years ended December 31, 2023 and 2022, consisted of the following (dollars in thousands):

	Year Ended December 31, 2023		Year Ended December 31, 2022
Current income tax expense
Federal	$	(339)	$	(444)
State and local	(122)		2,777
Total current income tax expense	$	(461)	$	2,333
Deferred income tax expense
Federal	$	6,318	$	711
State and local	11,326		326
Total deferred tax expense	17,644		1,037
Total income tax expense	$	17,183	$	3,370

Total income tax expense differed from the amount computed by applying the federal statutory tax rate of 21.0% for the years ended December 31, 2023 and 2022, as a result of the following (dollars in thousands):

	Year Ended December 31, 2023		Year Ended December 31, 2022
Computed income tax expense at federal statutory rate on pre-tax income	$	(21,146)	$	4,117
State income tax expense, net of federal tax expense	(3,390)		1,542
Bankruptcy costs	8		153
Section 162(m) disallowance	1,106		1,510
Valuation allowance	40,946		—
Provision to return	(281)		22
Uncertain tax positions	(428)		(5,397)
Allowance for state tax receivables	—		943
Tax credits	(240)		(242)
Other adjustments	608		722
Net income tax expense	$	17,183	$	3,370

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are presented below (dollars in thousands):

	December 31, 2023		December 31, 2022
Deferred income tax assets:
Accounts receivable	$	1,517	$	1,507
Leases	40,952		42,912
Other liabilities and assets	4,358		5,229
Debt costs	617		840
Interest limitation	24,473		12,152
Financing liabilities	50,119		51,725
Net operating loss	7,669		305
Total deferred income tax assets before valuation allowance	129,705		114,670
Less: valuation allowance	(40,946)		—
Total deferred tax assets	$	88,759	$	114,670
Deferred income tax liabilities:
Intangible assets	$	43,563	$	46,709
Property and equipment	26,568		25,821
Leases	30,953		35,141
Other	—		1,680
Total deferred income tax liabilities	$	101,084	$	109,351
Total net deferred income tax (liabilities)/assets	$	(12,325)	$	5,319

Deferred tax assets and liabilities are computed by applying the federal and state income tax rates in effect to the gross amounts of temporary differences between the tax and financial reporting bases of our assets and liabilities and other tax attributes. In assessing if the deferred tax assets will be realized, the Company considers whether it is more likely than not that some or all of these deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which these deductible temporary differences reverse.

As of December 31, 2023, the Company recorded a valuation allowance of $40.9 million on the deferred tax assets related to a portion of disallowed interest expense carryforwards and other attributes because it is more likely than not that some of the tax benefits will not be realized in the future, primarily from recent losses driven by the impairment of our FCC broadcast licenses.

As of December 31, 2022, the Company did not record a valuation allowance because all of the deferred tax assets were more likely than not to be realized based on the future reversal of existing deferred tax liabilities and projections of future taxable income.

As of December 31, 2023, the Company had Federal net operating loss carryforwards available to offset future taxable income of approximately $27.6 million, which can be carried forward to future years indefinitely. The Company had state net operating loss carryforwards available to offset future income of approximately $44.0 million which, if not utilized, will expire 2028 through 2043. As of December 31, 2023, the Company had deferred tax assets related to federal and state interest expense disallowance carryforwards of $24.5 million, which are available to offset future taxable income and have an indefinite carryforward period.

The Company recorded reductions to uncertain tax positions of $0.4 million and relevant interest and penalties of $0.1 million as a result of the expiration of the applicable statute of limitations as of December 31, 2023. The Company records interest and penalties related to uncertain tax positions in income tax expense. For interest and penalties, the income tax expense amounts recorded were not material in the years ended December 31, 2023 and 2022. No interest and penalties were accrued as of December 31, 2023. As of December 31, 2022, the total interest and penalties accrued was $0.1 million.

As of December 31, 2023, the Company had no uncertain tax positions. As of December 31, 2022, the total uncertain tax positions and accrued interest and penalties were $0.5 million.

All federal income tax returns are closed for tax years through 2019. For the majority of state and local tax jurisdictions in which the Company is subject to income tax audits, tax years through 2019 have been closed.

The following table reconciles uncertain tax positions (dollars in thousands):

	Year Ended December 31, 2023		Year Ended December 31, 2022
Balance at beginning of period	$	385	$	5,570
Decreases relating to expiration of the statute of limitations	(385)		(5,185)
Balance at end of period	$	—	$	385