Income Taxes

6 Months Ended

Jun. 30, 2024

Income Taxes

Income Taxes

9. Income Taxes

The Company’s effective tax rates on pre-tax income were 27.7% and 38.9% for the three months ended June 30, 2024 and 2023, respectively, and 28.2% and 28.6% for the six months ended June 30, 2024 and 2023, respectively. The decrease in the effective tax rate for the three months ended June 30, 2024, compared to the corresponding period in the prior year was primarily due to limitation of executive compensation deductibility related to the former CEO’s retention agreement recognized in the second quarter of 2023. The effective tax rate for the six months

ended June 30, 2024 was consistent with the rate in the comparable period in the prior year as the limitation of executive compensation deductibility recognized in the second quarter of 2023 was offset by a reduction in a valuation allowance related to interest deductibility due to a state tax law change recognized in the first quarter of 2023.

For the six months ended June 30, 2024 and 2023, the effective tax rate differs from the U.S. federal statutory income tax rate as follows:

	June 30,
	2024		2023
Tax at federal statutory rate	21.0	%	21.0	%
State taxes, net	6.2		5.1
Valuation allowance	—		(1.4)
Permanent items (1)	1.9		4.7
Other	(0.9)		(0.8)
Effective income tax rate	28.2	%	28.6	%

(1) Includes the deductibility limitations on excess compensation.