Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The income tax provision charged to operations for the years ended December 31, 2023, 2022 and 2021 was as follows (in thousands):

	Years Ended December 31,
	2023		2022		2021
Current:
U.S. Federal	$	106,721	$	117,395	$	90,920
State and local	3,796		3,835		2,345
Current income tax expense	110,517		121,230		93,265
Deferred (benefit) expense	1,399		1,263		(228)
Total income tax expense	$	111,916	$	122,493	$	93,037

Although TPL was a trust until January 11, 2021, it was historically taxed as if it were a corporation for income tax purposes prior to its conversion to a corporation.

Total income tax expense differed from the amounts computed by applying the U.S. Federal income tax rate of 21% for the years ended December 31, 2023, 2022 and 2021 to income before Federal income taxes as a result of the following (in thousands):

	Years Ended December 31,
	2023			2022			2021
Computed tax expense at the statutory rate of 21%	$	108,688		$	119,460		$	76,234
Reduction in income taxes resulting from:
Statutory depletion	(682)			(823)			(584)
State taxes	3,439			3,045			1,740
Executive compensation	1,117			1,146			1,687
Prior year tax adjustments	(305)			(13)			18
Correction of historical tax depletion	—			805			12,975
Estimated penalties and interest	—			(763)			1,022
Other, net	(341)			(364)			(55)
Total income tax expense	$	111,916		$	122,493		$	93,037
Effective tax rate	21.6		%	21.5		%	25.6		%

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities as of December 31, 2023 and 2022 are as follows (in thousands):

	December 31, 2023		December 31, 2022
Unearned revenue	$	6,717	$	5,621
Stock compensation	2,097		1,256
Other	760		48
Total deferred tax assets	9,574		6,925
Property, plant and equipment	17,532		16,958
Real estate and royalty interests	33,215		30,387
Pension plan asset	767		731
Other, net	425		—
Total deferred tax liabilities	51,939		48,076
Deferred taxes payable	$	(42,365)	$	(41,151)

TPL is subject to taxation in the United States and Texas. TPL is no longer subject to U.S. Federal income tax examination by tax authorities for tax years before 2020.