Income Taxes |
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Income Taxes | 14. Income Taxes The components of the provision for income taxes are comprised of the following for the years ended December 31:
Income tax results differed from the amount computed by applying the U.S. statutory income tax rate to income (loss) before income taxes for the following reasons for the years ended December 31:
Income tax expense (benefit) was $1.9 million, ($8.5) million and $7.6 million for the years ended December 31, 2021, 2020 and 2019, respectively. The effective tax rate for the years ended December 31, 2021, 2020, and 2019 was (71.3)%, 25.2% and 38.9%, respectively. The fluctuation in the rate for the years ended December 31, 2021, 2020 and 2019, respectively, results primarily from the relationship of year-to-date income (loss) before income tax and the discrete treatment of the bonus amounts and transaction costs paid in connection with the Business Combination discussed in Note 3 as well as the fluctuation in the permanent add-back related to the change in fair value of warrant liabilities on the Company’s warrants and the impact of state tax expense based off of gross receipts. Deferred Income Taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities and their tax bases, as well as from net operating loss and carryforwards. Significant components of the deferred tax assets and liabilities for the Company are as follows:
Tax loss carryovers for federal and foreign income tax purposes totaled $153.0 million at December 31, 2021 as shown in the below table. Approximately $7.6 million of these federal and foreign income tax loss carryovers expire between 2023 and 2042. The remaining $145.4 million of federal income tax loss carryovers do not expire. The availability of these tax losses to offset future income varies by jurisdiction. Furthermore, the ability to utilize the tax losses may be subject to additional limitations upon the occurrence of certain events, such as changes in ownership of the Company. Realization is dependent on generating sufficient taxable income prior to expiration of the loss carryforwards. Although realization is not assured, the Company believes it is more likely than not that all of the deferred tax asset will be realized. The amount of the deferred tax asset considered realizable, however, could be reduced if estimates of future taxable income during the carryforward period are reduced. A valuation allowance has been established against the deferred tax assets to the extent it is not more likely than not they will be realized.
Unrecognized Tax Positions No amounts have been accrued for uncertain tax positions as of December 31, 2021 and 2020. However, management's conclusion regarding uncertain tax positions may be subject to review and adjustment at a later date based on ongoing analyses of tax laws, regulations, and interpretations thereof and other factors. The Company does not have any unrecognized tax benefits as of December 31, 2021 and 2020 and does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. Additionally, no interest or penalty related to uncertain taxes has been recognized in the accompanying consolidated financial statements. The Company is subject to taxation in US, Canada, Mexico and state jurisdictions. The Company’s tax returns are subject to examination by the applicable tax authorities prior to the expiration of statute of limitations for assessing additional taxes, which generally ranges from to five years after the end of the applicable tax year. Therefore, as of December 31, 2021, tax years for 2015 through 2021 generally remain subject to examination by the tax authorities. In addition, in the case of certain tax jurisdictions in which the Company has loss carryforwards, the tax authority in some of these jurisdictions may examine the amount of the tax loss carryforward based on when the loss is utilized rather than when it arises. |