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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes |
16. | INCOME TAXES
Income tax provision (benefit) consists of the following (in thousands):
|  | Year Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Current income tax provision: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 52,634 |  |  | $ | 28,830 |  |  | $ | 30,450 |
State |  |  | 13,996 |  |  |  | 9,126 |  |  |  | 15,192 |
|  |  | 66,600 |  |  |  | 37,956 |  |  |  | 45,642 |
Deferred income tax provision: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 2,869 |  |  |  | 20,000 |  |  |  | 21,607 |
State |  |  | 1,346 |  |  |  | 4,256 |  |  |  | (595 | )
|  |  | 4,215 |  |  |  | 24,256 |  |  |  | 21,012 |
Total income tax provision |  | $ | 70,815 |  |  | $ | 62,212 |  |  | $ | 66,654 |
The Company’s effective tax rate for the year ended December 31, 2023, was 25.6% and was comparable to the effective tax rate for the year ended December 31, 2022, of 25.2%, which resulted in income tax expense of $70.8 million and $62.2 million, respectively. The income tax provision differs from the amount of income tax determined by applying the U.S. Federal statutory rate to income before taxes as a result of the following (in thousands):
|  | Year Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
U.S. Federal statutory taxes |  | $ | 58,002 |  |  | $ | 51,836 |  |  | $ | 57,832 |
State and local taxes, net of U.S. Federal benefit |  |  | 12,296 |  |  |  | 10,608 |  |  |  | 12,174 |
Permanent items |  |  | 1,320 |  |  |  | (208 | ) |  |  | 1,208 |
Excess tax benefits from vesting or settlement of stock compensation awards |  |  | (656 | ) |  |  | (11 | ) |  |  | (2,868 | )
Federal credits |  |  | (755 | ) |  |  | (598 | ) |  |  | (686 | )
Other |  |  | 608 |  |  |  | 585 |  |  |  | (1,006 | )
Total income tax provision |  | $ | 70,815 |  |  | $ | 62,212 |  |  | $ | 66,654 |
Deferred tax assets and liabilities consist of the following (in thousands):
|  | As of December 31, |
|  | 2023 |  |  | 2022 |
Deferred tax assets: |  |  |  |  |  |  |  |
Operating lease liability |  |  | 6,886 |  |  |  | 7,941 |
Product and surface flaking warranty reserves |  |  | 5,645 |  |  |  | 6,469 |
State tax credit carryforwards |  |  | 4,250 |  |  |  | 4,084 |
Deferred revenue |  |  | 4,215 |  |  |  | 2,921 |
Tax Cut and Jobs Act capitalization of research and development costs |  |  | 3,956 |  |  |  | 2,152 |
Stock-based compensation |  |  | 2,361 |  |  |  | 1,146 |
Inventories |  |  | 639 |  |  |  | 2,965 |
Accruals not currently deductible and other |  |  | — |  |  |  | 373 |
Net Operating Losses |  |  | — |  |  |  | 132 |
Gross deferred tax assets, before valuation allowance |  |  | 27,952 |  |  |  | 28,183 |
Valuation allowance |  |  | (3,307 | ) |  |  | (3,026 | )
Gross deferred tax assets, after valuation allowance |  |  | 24,645 |  |  |  | 25,157 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Depreciation |  |  | (74,794 | ) |  |  | (74,604 | )
Inventories |  |  | (10,627 | ) |  |  | (6,749 | )
Operating lease right-of-use asset |  |  | (6,677 | ) |  |  | (7,687 | )
Goodwill amortization |  |  | (3,536 | ) |  |  | (2,879 | )
Other |  |  | (1,450 | ) |  |  | (1,462 | )
Gross deferred tax liabilities |  |  | (97,084 | ) |  |  | (93,381 | )
Net deferred tax liability |  | $ | (72,439 | ) |  | $ | (68,224 | )
The Company recognizes deferred tax assets and liabilities based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted tax laws and statutory tax rates. In accordance with accounting standards, the Company assesses the likelihood that its deferred tax assets will be realized. Deferred tax assets are reduced by a valuation allowance when, after considering all available positive and negative evidence, it is determined that it is more likely than not that some portion, or all, of the deferred tax asset will not be realized, primarily certain state income tax credits. As of December 31, 2023, the Company had a valuation allowance of $3.3 million against deferred tax assets it estimates will not be realized. The Company will analyze its position in subsequent reporting periods, considering all available positive and negative evidence, in determining the expected realization of its deferred tax assets. The Company recognizes interest and penalties related to tax matters as a component of “Selling, general and administrative expenses” in the accompanying Consolidated Statements of Comprehensive Income. As of December 31, 2023, the Company has identified no uncertain tax position and, accordingly, has not recorded any unrecognized tax benefits or associated interest and penalties. The Company operates in multiple tax jurisdictions and, in the normal course of business, its tax returns are subject to examination by various taxing authorities. Such examinations may result in future assessments by these taxing authorities, and the Company has accrued a liability when it believes that it is not more likely than not that it will realize the benefits of tax positions that it has taken or for the amount of any tax benefit that exceeds the cumulative probability threshold in accordance with accounting standards. As of December 31, 2023, for certain tax jurisdictions, tax years 2019 through 2023 remain subject to examination. The Company believes that adequate provisions have been made for all tax returns subject to examination. Sales made to foreign distributors are not taxable in any foreign jurisdictions as the Company does not have a taxable presence.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
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