Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Note 10. Income Taxes

Our provision (benefit) for income taxes consists of the following:

	Year Ended December 31,
	2023		2022		2021
Current:
Federal	$	—	$	—	$	—
State	(106)		385		680
Foreign	503		233		350
	397		618		1,030
Deferred:
Foreign	(1,895)		(817)		(1,971)
	(1,895)		(817)		(1,971)
	$	(1,498)	$	(199)	$	(941)

A reconciliation of our effective tax rate and the current U.S. Federal statutory income tax rate is as follows:

	Year Ended December 31,
	2023		2022		2021
Taxes at statutory U.S. federal income tax rate	21.0	%	21.0	%	21.0	%
Nontaxable income of SVC	(21.0)	%	(21.0)	%	(21.0)	%
State and local income taxes, net of federal tax benefit	0.3	%	(0.3)	%	(0.1)	%
Foreign taxes	(6.9)	%	0.4	%	0.3	%
Foreign tax rate change	11.0	%	0.0	%	0.0	%
Effective tax rate	4.4	%	0.1	%	0.2	%

Deferred income tax balances generally reflect the net tax effects of temporary differences between the carrying amounts of certain of our assets and liabilities in our consolidated balance sheets and the amounts used for income tax purposes and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. In December 2023, our subsidiary which operates in Puerto Rico elected to be taxed as a corporation for purposes of Puerto Rico tax law. This election increased the entity’s tax rate in Puerto Rico from 29.0% to 37.5%. The result of this change is primarily offset by available tax concessions in Puerto Rico. Significant components of our deferred tax assets and liabilities are as follows:

	As of December 31,
	2023		2022
Deferred tax assets:
Tax loss carryforwards	$	112,532	$	109,650
Other	7,973		7,134
Deferred tax assets	120,505		116,784
Valuation allowance	(120,505)		(116,784)
Net deferred tax assets	$	—	$	—
Deferred tax liabilities:
Property basis difference	$	(7,970)	$	(5,947)
Puerto Rico deferred tax gain	(8,162)		(12,079)
Net deferred tax liabilities	$	(16,132)	$	(18,026)

Net deferred tax liabilities are included in accounts payable and other liabilities in our consolidated balance sheets.

At December 31, 2023 and 2022, our consolidated TRS had a net deferred tax asset, prior to any valuation allowance, of $114,145 and $111,148, respectively, which consists primarily of the tax benefit of net operating loss carryforwards and tax credits. Because of the uncertainty surrounding our ability to realize the future benefit of these assets, we have provided a 100% valuation allowance as of December 31, 2023 and 2022. As of December 31, 2023 and 2022, our consolidated TRS had net operating loss carryforwards for federal income tax purposes of approximately $442,560 and $437,606, respectively, which partially expire starting in 2026. At December 31, 2023 and 2022, we recorded a deferred tax liability of $8,162 and $13,658, respectively, as a result of the book value to tax basis difference related to the accounting of an insurance settlement in 2020.

At December 31, 2023 and 2022, we, excluding our subsidiaries, had net operating loss carryforwards for federal income tax purposes of approximately $514,568 and $545,828, respectively, of which certain losses incurred prior to 2018 partially expire starting in 2027.