Income Taxes

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income TaxesFor the three months ended June 30, 2023, the Company recorded an income tax expense of $2.7 million, reflecting a 17.0% effective tax rate, compared to a $0.8 million income tax benefit for the three months ended June 30, 2022, reflecting a 17.0% effective tax rate. The income tax expense for the three months ended June 30, 2023 as compared to the benefit for the same period in 2022 was primarily due to higher pretax book income and changes in the relative weighting of jurisdictional income and loss, partially offset by a net discrete tax benefit related to a research and development credit.For the six months ended June 30, 2023, the Company recorded an income tax provision of $7.1 million, reflecting a 21.9% effective tax rate, compared to $0.1 million expense for the six months ended June 30, 2022. The income tax expense for the six months ended June 30, 2023 was higher compared to the same period in 2022, primarily due to higher pretax book income and changes in the relative weighting of jurisdictional income and loss, partially offset by a net discrete tax benefit related to a research and development credit.

The Company's recorded liability for uncertain tax positions was $12.5 million and $12.0 million as of June 30, 2023 and December 31, 2022, respectively. The increase is the result of $0.5 million of incremental reserves associated with the 2023 research and development credit. The Company does not anticipate a significant change in unrecognized tax benefits due to the expiration of relevant statutes of limitations and federal, state and foreign tax audit resolutions over the next twelve months.

The Company regularly assesses the likelihood of an adverse outcome resulting from examinations to determine the adequacy of its tax reserves. The Company is currently under audit by the U.S. Internal Revenue Service for the federal income tax return from the 2018 tax year as well as various other state income tax and jurisdictional audits. As of June 30, 2023, the Company believes that it is more-likely-than-not that the tax positions it has taken will be sustained upon the resolution of its audits, resulting in no material impact on its consolidated financial position, results of operations and cash flows. However, the final determination with respect to any tax audits, and any related litigation, could be materially different from the Company's estimates and/or from its historical income tax provisions and accruals and could have a material effect on operating results and/or cash flows in the periods for which that determination is made. In addition, future period earnings may be adversely impacted by litigation costs, settlements, penalties and/or interest assessments.

On August 16, 2022, the Inflation Reduction Act of 2022 ("IRA") was signed into law. The IRA levies a 1% excise tax on net stock repurchases after December 31, 2022 and imposes a 15% corporate alternative minimum tax ("CAMT") for tax years beginning after December 31, 2022. The Company did not repurchase any shares during the three and six months ended June 30, 2023. CAMT does not impact the Company's results of operations or financial position.