INCOME TAXES (Tables)
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12 Months Ended |
Dec. 31, 2021 |
Income Tax Disclosure [Abstract] |
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Provision for income taxes on continuing operations |
The provision for income tax expense for the years ended December 31, 2021, 2020 and 2019 is summarized as follows:
| | | | | | | | | | | | | | | | | | | Year Ended December 31, | | 2021 | | 2020 | | 2019 | Current: | | | | | | Federal | $ | 1,768 | | | $ | 5,058 | | | $ | 562 | | State | 566 | | | 1,478 | | | 278 | | Total current | 2,334 | | | 6,536 | | | 840 | | Deferred: | | | | | | Federal | (1,360) | | | (3,348) | | | 1,070 | | State | (392) | | | (838) | | | 175 | | Total deferred | (1,752) | | | (4,186) | | | 1,245 | | | | | | | | Total income tax expense | $ | 582 | | | $ | 2,350 | | | $ | 2,085 | |
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Reconciliation of federal statutory rate to effective tax rate |
A reconciliation of the federal statutory rate to the effective tax rate for income from continuing operations for the years ended December 31, 2021, 2020 and 2019, respectively, is comprised as follows:
| | | | | | | | | | | | | | | | | | | Year Ended December 31, | | 2021 | | 2020 | | 2019 | Income tax expense at statutory rate | 21.0 | % | | 21.0 | % | | 21.0 | % | State income taxes - net of federal benefit | 3.9 | | | 2.7 | | | 6.8 | | Non-deductible meals and entertainment | 1.8 | | | 0.3 | | | 1.8 | | Non-deductible equity compensation(c) | 19.4 | | | — | | | — | | Section 162(m) limitation | 2.1 | | | — | | | — | | Non-deductible accrued bonus | 2.7 | | | — | | | — | | Other non-deductible expenses | 0.7 | | | 0.1 | | | 0.8 | | Transaction costs(a) | — | | | — | | | 41.2 | | Tax credits | — | | | — | | | (1.6) | | Deductible equity compensation(b) | (34.1) | | | (10.8) | | | (30.0) | | Noncontrolling interest | 5.0 | | | 0.3 | | | — | | Other adjustments | (1.2) | | | (0.5) | | | (0.4) | | Total income tax provision(d) | 21.3 | % | | 13.1 | % | | 39.6 | % |
| | | | | | | | | (a) | | The Company's completion of the Spin-Off in the year ended December 31, 2019 resulted in the Company not being able to deduct approximately $10,300 of the related transaction costs, which increased the effective tax rate significantly and affected all items that were impacted by this exclusion. | (b) | | During the year ended December 31, 2021, employees exercised stock options representing approximately 115 shares. During the year ended December 31, 2020, employees exercised stock options representing approximately 239 shares. During the year ended December 31, 2019, employees exercised stock options representing approximately 100 shares and had restricted stock awards vest representing 960 shares. These exercises and vestings resulted in tax benefits that reduced the Company's effective tax rate significantly in all three years. | (c) | | During the year ended December 31, 2021, approximately $2,528 of the share-based compensation expense related to restricted stock did not result in a deferred tax asset because it will be subject to future limitation under IRC Section 162(m). | (d) | | Certain items in the prior year have been reclassified to conform with the current year presentation. |
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Deferred tax assets and liabilities |
The Company’s deferred tax assets and liabilities for the years ended December 31, 2021 and 2020 are summarized below.
| | | | | | | | | | | | | Year Ended December 31, | | 2021 | | 2020 | Deferred tax assets (liabilities): | | | | Accrued expenses | $ | 9,829 | | | $ | 8,181 | | Allowance for doubtful accounts | 1,728 | | | 875 | | State taxes | — | | | 147 | | Lease liabilities | 79,575 | | | 80,979 | | Insurance | 953 | | | 277 | | Gross deferred tax assets | 92,085 | | | 90,459 | | Less: valuation allowance | (25) | | | (15) | | Net deferred tax assets | 92,060 | | | 90,444 | | Depreciation and amortization | (8,432) | | | (7,512) | | Prepaid expenses | (907) | | | (780) | | Right of use asset | (78,656) | | | (80,055) | | State taxes | (217) | | | — | | Total deferred tax liabilities | (88,212) | | | (88,347) | | Net deferred tax assets (liabilities) | $ | 3,848 | | | $ | 2,097 | |
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Schedule of unrecognized tax benefits |
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
| | | | | | | | | | | | | | | | | | | Year Ended December 31, | | 2021 | | 2020 | | 2019 | Balance at January 1 | $ | — | | | $ | — | | | $ | — | | Additions for tax positions of prior years | 188 | | | — | | | — | | Reductions for tax positions related to the current year | (123) | | | — | | | — | | Balance at December 31 | 65 | | | $ | — | | | $ | — | |
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