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INCOME TAXES
 9 Months Ended
Sep. 30, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Effective tax rate
The Company determines the tax provision for interim periods using an estimate of our annual effective tax rate ("ETR"), adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual ETR, and if our estimated tax rate changes, we make a cumulative adjustment. If a reliable estimate of the annual ETR cannot be made, the actual ETR for the year to date may be the best estimate of the annual ETR.
For the three months ended September 30, 2024, our effective tax rate was (297.9)% compared to 55.8% in the same period in 2023. Our effective tax rate for the nine months ended September 30, 2024 was (26.4)% compared to 61.7% for the nine months ended September 30, 2023. These changes were primarily driven by the establishment of a federal and state valuation allowance on deferred tax assets.
Valuation allowance                                                                
Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ending December 31, 2024. Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth.                            
Based on this evaluation, as of September 30, 2024, a valuation allowance of $13.5 million was recorded to recognize the portion of the deferred tax assets that is not likely to be realized.
The amount of the deferred tax assets considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are adjusted, or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for future growth.