| Income Taxes The Company’s effective tax rate for the three and six months ended June 30, 2023 was (45.5)% and 16.6%, respectively, compared to 24.9% and 25.5% for the three and six months ended June 30, 2022, respectively. The Company provides for the effects of income taxes in interim financial statements based on the Company’s estimate of its annual effective tax rate for the full year, which is based on forecasted income by jurisdiction where the Company operates, adjusted for any tax effects of items that relate discretely to the period, if any.
The provision for income taxes differs from the amount computed by applying the U.S. federal statutory rate to income before provision for income taxes and consisted of the following (dollars in thousands):
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2023 |
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2022 |
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2023 |
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2022 |
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Amount |
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Rate |
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Amount |
|
Rate |
|
Amount |
|
Rate |
|
Amount |
|
Rate |
| Income tax (benefit) expense at the federal statutory rate |
$ |
(1,260) |
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21.0 |
% |
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$ |
11,786 |
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21.0 |
% |
|
$ |
(3,668) |
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|
21.0 |
% |
|
$ |
21,139 |
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21.0 |
% |
| State income tax expense (benefit), net of federal benefit |
315 |
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(5.3) |
% |
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2,389 |
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4.3 |
% |
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(424) |
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2.4 |
% |
|
4,422 |
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4.4 |
% |
| (Windfall) shortfall tax benefits, net related to stock-based compensation |
119 |
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(2.0) |
% |
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(1,758) |
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(3.1) |
% |
|
773 |
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(4.4) |
% |
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(2,064) |
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(2.1) |
% |
| Change in valuation allowance |
17 |
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(0.3) |
% |
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23 |
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0.0 |
% |
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244 |
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(1.4) |
% |
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(81) |
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(0.1) |
% |
Permanent and other items (1)
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3,537 |
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(58.9) |
% |
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1,515 |
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2.7 |
% |
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170 |
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(1.0) |
% |
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2,296 |
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2.3 |
% |
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$ |
2,728 |
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(45.5) |
% |
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$ |
13,955 |
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24.9 |
% |
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$ |
(2,905) |
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16.6 |
% |
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$ |
25,712 |
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25.5 |
% |
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| (1) |
Permanent items relate principally to compensation charges, qualified transportation fringe benefits, meals and entertainment, and other items principally related to the effect of providing taxes in the interim financial statements based on the estimated full year effective tax rate. |
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