Income Taxes

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The U.S. federal statutory tax rate was 21% for each of the three months ended March 31, 2023 and 2022. The Company’s effective tax rate for the three months ended March 31, 2023 was 14.4% of pretax income compared to the effective tax rate for the three months ended March 31, 2022 of 15.4%.

The difference between the U.S. federal statutory tax rate and the Company’s effective tax rate for the three months ended March 31, 2023 and March 31, 2022, was primarily due to a favorable impact from stock compensation excess tax benefits partially offset by state income taxes, Canadian taxes and other permanent difference items.

The Company had unrecognized tax benefits of approximately $0.5 million as of March 31, 2023 and December 31, 2022, respectively, which were included in other liabilities in the accompanying consolidated balance sheets.

The Company’s policy is to recognize interest and penalties related to income tax liabilities as a component of income tax expense in the consolidated statements of operations. The amount of interest and penalties charged to income tax expense related to unrecognized tax benefits was not significant for the three months ended March 31, 2023 and 2022.

The Company is subject to taxation in various jurisdictions. The Company’s 2019 through 2021 tax returns are subject to examination by U.S. federal authorities. The Company’s tax returns are subject to examination by various state authorities for the years 2018 through 2021.