Income taxes

12 Months Ended

Dec. 31, 2023

Income taxes

Income taxes

Note 7 - Income taxes

Income tax expense for the years ended December 31, 2023, 2022 and 2021 was $17.6 million, $13.4 million and $1.1 million, respectively. The income tax expense (benefit) for each of the years ended December 31, 2023, 2022 and 2021 were provided for federal and state income tax at statutory rates applied to the pre-tax income (loss) for each of the periods.

The following summarizes the provision for income taxes:

Years Ended December 31,	2023		2022		2021
(in thousands)
Current:
Federal	$	10,319	$	11,995	$	453
State and local		2,940		2,835		350
		13,259		14,830		803
Deferred:
Federal		3,667		(323)		267
State and local		647		(1,126)		70
		4,314		(1,449)		337
Expense for income taxes	$	17,573	$	13,381	$	1,140

Reconciliation of the Company’s actual tax rate to the U.S. Federal statutory rate is as follows:

Years ended December 31,	2023		2022		2021
Income tax rates
- Statutory U.S. federal rate	21	%	21	%	21	%
- State income taxes, net of federal benefit	4	%	4	%	0	%
- Excess tax benefits related to stock compensation	(1)	%	(1)	%	(4)	%
- 162m limitation	1	%	1	%	—
- PPP Benefit	0	%	0	%	(2)	%
- Change in valuation allowance	0	%	(13)	%	(12)	%
- Other true-up	0	%	(1)	%	—
Total	25	%	11	%	3	%

For the year ended December 31, 2023, the Company had no federal NOLs carryforward. For the year ended December 31, 2023, the Company had state tax NOL carryforwards of approximately $1.8 million, expiring in various years.

Deferred income tax represents the tax effect of the differences between the book and tax bases of assets and liabilities. The net deferred income tax assets (liabilities) consisted of the following at:

December 31,	2023		2022
(in thousands)
Deferred tax assets (liabilities):
- Reserve for doubtful accounts	$	497	$	500
- Inventory reserve		687		1,045
-Non qualified stock options		529		383
- Deferred interest		—		2,637
- Accrued expenses		82		107
Total Deferred income tax assets	$	1,795	$	4,672
Deferred tax liabilities:
- Depreciation and amortization		(6,353)		(4,916)
Total deferred tax liabilities		(6,353)		(4,916)
Net deferred tax liabilities	$	(4,558)	$	(244)

We review the likelihood that we will realize the benefit of our deferred tax assets, and therefore the need for valuation allowances, on a quarterly basis. In determining the requirement for a valuation allowance, the historical and projected financial results are considered, along with all other available positive and negative evidence.

The Company’s 2019 and prior federal tax years have been closed. The Company operates in many states throughout the United States and, as of December 31, 2023, the state statutes of limitations remain open for tax years subsequent to 2018. The Company recognizes interest and penalties, if any, relating to income taxes as a component of the provision for income taxes.