XML 75 R18.htm IDEA: XBRL DOCUMENT v3.22.4
Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The provision for income taxes consists of the following:
 Year Ended December 31,
 202220212020
Current:   
Federal$412,036 $272,971 $151,532 
State126,686 80,650 42,769 
Deferred:   
Federal(6,753)873 (13,289)
State(4,350)(810)(4,227)
 Income tax expense$527,619 $353,684 $176,785 
Deferred income taxes on our consolidated balance sheets were comprised of the following:
 As of December 31,
 20222021
Deferred tax assets:  
Other accrued expenses and contract land deposit reserve$73,555 $64,123 
Deferred compensation4,728 4,682 
Equity-based compensation expense47,605 46,020 
Inventory13,981 13,014 
Unrecognized tax benefit8,849 10,634 
Other11,364 9,876 
Total deferred tax assets160,082 148,349 
Less: Deferred tax liabilities8,505 7,874 
Net deferred tax asset$151,577 $140,475 
Deferred tax assets arise principally as a result of various accruals required for financial reporting purposes and equity-based compensation expense, which are not currently deductible for tax return purposes.
Management believes that we will have sufficient future taxable income to make it more likely than not that the net deferred tax assets will be realized. Federal taxable income is estimated to be approximately $1,997,100 for the year ended December 31, 2022, and was $1,348,600 for the year ended December 31, 2021.
A reconciliation of income taxes computed at the federal statutory rate (21% in 2022, 2021, and 2020) to income tax expense is as follows:
 Year Ended December 31,
 202220212020
Income taxes computed at the federal statutory rate$473,171 $333,985 $226,387 
State income taxes, net of federal income tax benefit (1)105,867 72,082 47,469 
Excess tax benefits from equity-based compensation (50,324)(48,369)(92,234)
Other, net (2)(1,095)(4,014)(4,837)
Income tax expense$527,619 $353,684 $176,785 
(1)Excludes state excess tax benefits from equity-based compensation included in the line below.
(2)Primarily attributable to tax benefits from certain energy credits for the years ended December 31, 2022, 2021 and 2020.
Our effective tax rate in 2022, 2021 and 2020 was 23.42%, 22.24% and 16.40%, respectively.
We file a consolidated U.S. federal income tax return, as well as state and local tax returns in all jurisdictions where we maintain operations. With few exceptions, we are no longer subject to income tax examinations by tax authorities for years prior to 2019.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
 Year Ended December 31,
 20222021
Balance at beginning of year$33,490 $36,817 
Additions based on tax positions related to the current year1,326 3,436 
Reductions for tax positions of prior years(5,290)(6,763)
Settlements— — 
Balance at end of year$29,526 $33,490 

If recognized, the total amount of unrecognized tax benefits that would affect the effective tax rate (net of the federal tax benefit) is $23,326 as of December 31, 2022.
We recognize interest related to unrecognized tax benefits as a component of income tax expense. For the years ended December 31, 2022, 2021, and 2020, we recognized a net reversal of accrued interest on unrecognized tax benefits in the amount of $3,662, $1,455 and $420, respectively. As of December 31, 2022 and 2021, we had a total of $10,186 and $13,849, respectively, of accrued interest on unrecognized tax benefits which are included in “Accrued expenses and other liabilities” on the accompanying consolidated balance sheets. We believe that within the next 12 months, it is reasonably possible that the unrecognized tax benefits, excluding interest, as of December 31, 2022 will be reduced by approximately $3,720 due to statute expiration and effectively settled positions in various state jurisdictions.