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INCOME TAX | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
INCOME TAX | INCOME TAX Income tax provision (benefit) on income from operations consists of the following:
| Years Ended December 31,
| 2022 |  | 2021 |  | 2020
Current: |  |  |  |  |
Federal | $ | 84,570 |  |  | $ | 7,591 |  |  | $ | (10,538) |
State | 25,975 |  |  | 3,203 |  |  | (1,304) |
| 110,545 |  |  | 10,794 |  |  | (11,842) |
Deferred | (87,192) |  |  | (13,271) |  |  | (7,936) |
| $ | 23,353 |  |  | $ | (2,477) |  |  | $ | (19,778) |
Reconciliation of the U.S. statutory income tax rate to our effective income tax expense rate for operations follows:
| Years Ended December 31,
| 2022 |  | 2021 |  | 2020
Federal income tax expense at statutory rate | $ | 39,395 |  |  | $ | 33,386 |  |  | $ | 36,759 |
State income tax, net of federal income tax benefit | 9,197 |  |  | 5,594 |  |  | 6,677 |
Net operating loss carryback | (261) |  |  | 3,391 |  |  | (3,445) |
Excess tax benefits of share-based compensation | (7,752) |  |  | (47,675) |  |  | (60,190) |
Tax credits | (31,334) |  |  | (4,999) |  |  | (3,867) |
Non-deductible business expenses | 5,425 |  |  | 7,542 |  |  | 4,199 |
Uncertain tax positions | 8,338 |  |  | (425) |  |  | — |
Other, net | 345 |  |  | 709 |  |  | 89 |
| $ | 23,353 |  |  | $ | (2,477) |  |  | $ | (19,778) |
In 2022, we completed a multi-year research and development tax credit study, which resulted in a $31.3 million research tax credit benefit. The tax effects of the major items recorded as deferred tax assets and liabilities as of December 31 are:
| 2022 |  | 2021
Deferred income tax assets: |  |  |
Capitalized research and experimental expenditures | $ | 76,731 |  |  | $ | — |
Operating expenses not currently deductible | 17,263 |  |  | 16,639 |
Stock option and other employee benefit plans | 21,373 |  |  | 19,596 |
Loss and credit carryforwards | 8,589 |  |  | 18,604 |
Deferred revenue | 4,405 |  |  | 4,717 |
Other | 289 |  |  | — |
Total deferred income tax assets | 128,650 |  |  | 59,556 |
Valuation allowance | — |  |  | — |
Total deferred income tax assets, net of valuation allowance | 128,650 |  |  | 59,556 |
Deferred income tax liabilities: |  |  |
Intangible assets | (256,818) |  |  | (266,827) |
Property and equipment | (11,220) |  |  | (12,272) |
Prepaid expenses | (9,503) |  |  | (8,542) |
Total deferred income tax liabilities | (277,541) |  |  | (287,641) |
Net deferred income tax liabilities | $ | (148,891) |  |  | $ | (228,085) |
As of December 31, 2022, the capitalization and amortization requirements of research and experimental expenditures pursuant to the TCJA changes to Internal Revenue Code Section 174 resulted in a deferred tax asset of $76.7 million. As of December 31, 2022, we had federal net operating loss carryforwards of approximately $22.9 million, after-tax state net operating loss carryforwards of approximately $1.6 million, and tax credit carryforwards of approximately $4.1 million. The federal net operating loss carryforward will begin to expire in 2037, if not utilized, and a portion of the state net operating loss and tax credit carryforwards begin expiring in 2033, if not utilized. The acquired carryforwards are subject to an annual limitation but are expected to be realized. We believe it is more likely than not that all other deferred tax assets will be realized. However, the amount of the deferred tax asset considered realizable could be adjusted in the future if estimates of reversing taxable temporary differences are revised. The following table provides a reconciliation of the gross unrecognized tax benefits from uncertain tax positions for the years ended December 31:
| 2022 |  | 2021 |  |
Balance at beginning of period | $ | 4,635 |  |  | $ | 1,929 |  |  |
Additions for tax positions of prior period | 5,522 |  |  | 4,508 |  |  |
Reductions for tax positions of prior period | (170) |  |  | (10) |  |  |
Additions for tax positions of current period | 5,804 |  |  | 212 |  |  |
Settlements | — |  |  | — |  |  |
Expiration of statutes of limitations | (1,160) |  |  | (2,004) |  |  |
Balance at end of period | $ | 14,631 |  |  | $ | 4,635 |  |  |
As of December 31, 2022, $1.9 million of the unrecognized tax benefits are reflected as a decrease in deferred income taxes and $12.7 million are included in other long-term liabilities in our consolidated balance sheets. The total amount of unrecognized tax benefits, net of federal income tax benefit of state taxes, if recognized, that would affect the effective tax rate is $13.9 million as of December 31, 2022, and $4.3 million and $1.9 million as of December 31, 2021, and 2020, respectively. It is reasonably possible that events will occur during the next 12 months that would cause the total amount of unrecognized tax benefits to increase or decrease. However, we do not expect such increases or decreases to be material to the financial condition or results of operations. We are subject to U.S. federal income tax, as well as income tax of multiple state, local and foreign jurisdictions. We are routinely subject to income tax examinations by these taxing jurisdictions, but we do not have a history of, nor do we expect any material adjustments as a result of these examinations. With few exceptions, major U.S. federal, state, local and foreign jurisdictions are no longer subject to examination for years before 2018. As of February 22, 2023, no significant adjustments have been proposed by any taxing jurisdiction. We recognize interest and penalties related to uncertain tax positions as a component of income tax expense in the consolidated statements of income. Accrued interest and penalty amounts were not significant at December 31, 2022.

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