Income Taxes

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

10. INCOME TAXES

In each reporting period, the Company assesses available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of existing deferred tax assets. A significant component of this analysis is to determine whether the Company is in a cumulative loss position for the most recent three-year period. As a result of the Company’s financial performance in 2021, and the three-year period ended March 31, 2022, the Company is in a cumulative income position related to federal and certain state deferred tax assets. At March 31, 2022, the Company maintained an $6.6 million valuation allowance on other state deferred tax assets, including state net operating losses that are more likely than not to expire before utilization.

The Company’s effective tax rate from continuing operations was an expense of 24.2% and 0% for the three-month periods ended March 31, 2022 and 2021, respectively.