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Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The table below summarizes significant components of deferred tax assets and liabilities:
| December 31,
| 2022 |  | 2021
Deferred tax assets |  |  |
Allowance for expected credit losses | $ | 2,923 |  |  | $ | 2,048 |
Accrued vacation and bonus | 37,776 |  |  | 40,608 |
Share-based compensation | 14,599 |  |  | 14,374 |
Notes receivable from employees | 11,927 |  |  | 12,911 |
State net operating loss carryforward | 537 |  |  | 1,125 |
Foreign net operating and capital loss carryforward | 11,852 |  |  | 8,357 |
Foreign tax credit carryforward | 4,199 |  |  | 3,536 |
Deferred compensation | 3,049 |  |  | 534 |
Operating lease assets | 64,465 |  |  | 64,482 |
Employee benefits obligations | 519 |  |  | 340 |
Other, net | 763 |  |  | 4,037 |
Total deferred tax assets | 152,609 |  |  | 152,352 |
Deferred tax liabilities |  |  |
Revenue recognition | (6,406) |  |  | (6,779) |
Operating lease liabilities | (51,995) |  |  | (52,087) |
Property and equipment, net | (12,956) |  |  | (14,766) |
Equity debt discount | — |  |  | (4,214) |
Goodwill and intangible assets | (204,634) |  |  | (206,105) |
Total deferred tax liabilities | (275,991) |  |  | (283,951) |
Foreign withholding tax | (1,921) |  |  | (1,537) |
Valuation allowance | (6,459) |  |  | (10,315) |
Net deferred tax liabilities | $ | (131,762) |  |  | $ | (143,451) |
As of December 31, 2022 and 2021, the Company recorded certain deferred tax assets related to foreign tax credits, foreign capital loss and foreign net operating loss carryforwards, which can be carried forward for periods ranging from 9 years to indefinite. Based on forward-looking financial information, the Company believes it is not more likely than not that the attributes will be utilized. Therefore, valuation allowances of $6.5 million and $10.3 million are recorded against the Company’s deferred tax assets as of December 31, 2022 and 2021, respectively. As of December 31, 2022, a U.S. subsidiary of the Company (the “Licensor”) entered into an intellectual property license agreement with certain foreign subsidiaries of the Company in consideration of royalty payments that have been partially prepaid (the “License Agreement”). The prepaid royalties remitted to the Licensor are taxable in the U.S. for the year ended December 31, 2022 and represent intangible assets in the foreign subsidiaries that are eliminated in consolidation. The impact on the U.S. current income tax provision was mainly offset by a deferred foreign income tax benefit related to the future tax deductions arising from amortization of intangible assets in the foreign subsidiaries. The License Agreement provides sufficient future taxable income in the U.S. to fully utilize the Company’s existing foreign tax credits in the U.S., which were previously subject to a valuation allowance. The impact on the tax rate for the year ended December 31, 2022 was a combined $9.6 million tax benefit. During the year ended December 31, 2021, the valuation allowance on the deferred tax assets in Australia was released because of sustained profitability. Additionally, a valuation allowance was recorded in the U.S. on foreign tax credit carryforwards as the Company does not have sufficient foreign source income in the U.S. to fully utilize the foreign tax credits. As of December 31, 2022, the Company has not recorded a $41.3 million deferred tax liability related to the basis difference in the investment in our foreign subsidiaries, as the investment is considered permanent in nature. The table below summarizes the components of income before income tax provision from continuing operations:
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
Domestic | $ | 165,553 |  |  | $ | 136,008 |  |  | $ | 122,800 |
Foreign | 132,196 |  |  | 161,939 |  |  | 139,646 |
Total | $ | 297,749 |  |  | $ | 297,947 |  |  | $ | 262,446 |
The table below summarizes the components of income tax provision from continuing operations:
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
Current |  |  |  |  |
Federal | $ | 24,227 |  |  | $ | 11,050 |  |  | $ | 22,164 |
State | 12,935 |  |  | 8,328 |  |  | 10,257 |
Foreign | 34,917 |  |  | 37,656 |  |  | 29,390 |
| 72,079 |  |  | 57,034 |  |  | 61,811 |
Deferred |  |  |  |  |
Federal | (2,717) |  |  | 10,766 |  |  | 3,936 |
State | (1,173) |  |  | 3,458 |  |  | 362 |
Foreign | (5,954) |  |  | (8,277) |  |  | (14,345) |
| (9,844) |  |  | 5,947 |  |  | (10,047) |
Income tax provision | $ | 62,235 |  |  | $ | 62,981 |  |  | $ | 51,764 |
Our income tax provision from continuing operations resulted in effective tax rates that varied from the federal statutory income tax rate as summarized below:
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
Income tax expense at federal statutory rate | $ | 62,526 |  |  | $ | 62,569 |  |  | $ | 55,114 |
State income taxes, net of federal benefit | 10,486 |  |  | 8,643 |  |  | 10,567 |
Detriment from foreign tax rates | 5,811 |  |  | 4,375 |  |  | 1,175 |
Other expenses not deductible for tax purposes | 3,365 |  |  | 2,819 |  |  | 3,079 |
Adjustment to reserve for uncertain tax positions | (609) |  |  | 2,665 |  |  | (1,231) |
Share-based compensation | (9,372) |  |  | (6,167) |  |  | (6,560) |
Release of valuation allowance on foreign tax credits | (3,536) |  |  | — |  |  | (7,336) |
Income tax benefit related to the License Agreement, net | (2,034) |  |  | — |  |  | (3,899) |
Release of valuation allowance on Australian deferred tax asset | — |  |  | (5,063) |  |  | — |
U.S. foreign tax credits | (4,049) |  |  | (4,859) |  |  | — |
Valuation allowance on U.S. foreign tax credit carryforwards | — |  |  | 3,536 |  |  | — |
Deferred tax benefit of United Kingdom tax rate change | — |  |  | (3,167) |  |  | — |
Other adjustments, net | (353) |  |  | (2,370) |  |  | 855 |
Income tax provision | $ | 62,235 |  |  | $ | 62,981 |  |  | $ | 51,764 |
The income tax provision for the years ended December 31, 2022 and 2021 was $62.2 million and $63.0 million, respectively. The decrease in expense is primarily attributable to the $9.6 million income tax benefit related to the License Agreement, which was largely offset by the following 2021 favorable one-time tax adjustments: a $5.1 million benefit related to the release of the valuation allowance on our deferred tax assets in Australia because of sustained profitability and a $3.2 million benefit related to the remeasurement of our deferred tax asset related to an intellectual property license between our U.S. and United Kingdom (“U.K.”) subsidiaries due to a future change in the U.K. tax rate. We file numerous consolidated and separate income tax returns in the U.S. federal jurisdiction and in many city, state and foreign jurisdictions. We are no longer subject to U.S. federal income tax examinations for years prior to 2017. We are also no longer subject to state and local or foreign tax examinations by tax authorities for years prior to 2014. Our liability for uncertain tax positions was $3.2 million and $6.4 million as of December 31, 2022 and 2021, respectively. As of December 31, 2022, our accrual for the payment of tax-related interest and penalties was not significant

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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 -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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