INCOME TAXES

3 Months Ended

Mar. 31, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

10. INCOME TAXES

Income taxes are accounted for under the asset and liability method whereby deferred tax assets and liabilities are recognized for future tax consequences attributable to the temporary differences between the consolidated financial statements carrying amounts of assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company’s policy is to record estimated interest and penalties related to uncertain tax positions in income tax expense. 

The provision for income tax for the three months ended March 31, 2024 and 2023 was $39,472 and $199,257, respectively. The decrease in the year-over-year provision for income tax is the result of the Company’s lower year over year pre-tax book income.

The effective income tax rate for the three months ended March 31, 2024 is 19.0%. The difference between the effective income tax rate for the three months ended March 31, 2024 and the statutory income tax rate of 21.0% for the three months ended March 31, 2024 is due primarily to the estimated R&D credit, state income taxes and permanent tax differences. The effective income tax rate for the three months ended March 31, 2023 was 16.8%. The difference between the effective income tax rate for the three months ended March 31, 2023 and the statutory income tax rate of 21% for the three months ended March 31, 2023 was due to the estimated R&D credit, state income taxes and permanent tax differences.