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Income Taxes
 9 Months Ended
Sep. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes

10. Income Taxes

A reconciliation of the statutory federal income tax rate to our effective rate for continuing operations is provided below:

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

Statutory federal income tax rate

 

21.0

%

 

 

21.0

%

 

 

21.0

%

 

 

21.0

%

State income taxes, net of federal income tax

 

2.6

 

 

 

2.5

 

 

 

2.5

 

 

 

2.5

 

Stock-based compensation windfall benefit

 

(0.2

)

 

 

(0.1

)

 

 

(1.0

)

 

 

(2.2

)

Permanent differences and other

 

(0.1

)

 

 

0.4

 

 

 

(0.4

)

 

 

0.6

 

 

 

23.3

%

 

 

23.8

%

 

 

22.1

%

 

 

21.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

We base our estimate of deferred tax assets and liabilities on current tax laws and rates. In certain cases, we also base our estimate on business plan forecasts and other expectations about future outcomes. Changes in existing tax laws or rates could affect our actual tax results, and future business results may affect the amount of our deferred tax liabilities or the valuation of our deferred tax assets over time. Due to uncertainties in the estimation process, particularly with respect to changes in facts and circumstances in future reporting periods, as well as the residential homebuilding industry’s cyclicality and sensitivity to changes in economic conditions, it is possible that actual results could differ from the estimates used in previous analyses. These differences could have a material impact on our consolidated results of operations or financial position.

On July 4, 2025, H.R.1 - One Big Beautiful Bill was enacted into law (the “Act”). The Act makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. The Company's deferred income tax liabilities as of September 30, 2025, and December 31, 2024, were $172.0 million and $148.2 million, respectively. The increase was primarily due to the bonus depreciation and domestic research cost expensing elements of the Act. The Act did not have a material impact on our income tax expense for the period ending September 30, 2025, and we do not expect it to materially change our effective income tax rate for the year ending December 31, 2025. With further guidance from the U.S. Treasury and IRS expected, the Company is continuing to analyze the full impact of the Act on the Company’s financial statements and related disclosures. We anticipate the Act to have a material impact on our future financial results including cash flows. The permanent extension of 100% bonus depreciation and reinstating the expensing of domestic research costs is anticipated to reduce our cash tax payments in the current and future years, and increase our operating cash flows.