Income Taxes

6 Months Ended

Jun. 30, 2021

Income Taxes

Income Taxes

12. Income Taxes

Income tax expense attributable to income from operations differed from the amount computed by applying the statutory federal income tax rate of 21% as of June 30, 2021 and 2020, to pre-tax income as a result of the following:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Tax at the federal statutory rate	$	6,704	$	5,273	$	7,596	$	4,847
State income taxes (net of federal benefit)		1,124		884		1,274		813
Tax credits		(93)		(251)		(93)		(251)
Other		(36)		1		(26)		3
Total income tax expense	$	7,699	$	5,907	$	8,751	$	5,412

As of June 30, 2021 and December 31, 2020, the Company had income tax payable of $2.6 million and $2.7 million, respectively, included within other liabilities on the condensed consolidated balance sheets.

Significant judgment is required in evaluating the Company's uncertain tax positions and determining its provision for income taxes. The Company regularly assesses the likelihood of adverse outcomes resulting from potential examinations to determine the adequacy of its provision for income taxes and applies a “more-likely-than-not” in determining the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company has not identified any material unrecognized tax benefits as of either June 30, 2021 or December 31, 2020.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits net operating loss (“NOL”) carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The CARES Act also contains modifications on the limitation of business interest for tax years 2019 and 2020. The modifications to Section 163(j) increase the allowable business interest deduction from 30% of adjusted taxable income to 50% of adjusted taxable income. Based upon current facts and circumstances, the Company does not expect that these provisions would result in a material cash benefit or impact to the effective tax rate.

On December 27, 2020, the Taxpayer Certainty and Disaster Tax Relief Act of 2020, a part of the Consolidated Appropriations Act, 2021, was enacted also in response to the COVID-19 pandemic. This legislation provided extensions on several federal tax credits and the expansion of the Employee Retention Credit, in addition to many other

provisions. Based upon current facts and circumstances, the Company does not expect that these provisions would result in a material cash benefit or impact to the effective tax rate.

On March 11, 2021, the American Rescue Plan Act of 2021 was enacted also in response to the COVID-19 pandemic. This legislation contains various provisions that benefit both individuals and their employers, but also expands the definition of “covered employee” as defined by Section 162(m)(1) of the Internal Revenue Code. Based upon current facts and circumstances, the Company does not expect that these provisions would result in a material cash benefit or impact to the effective tax rate.