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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The total income before income taxes, classified by source of income, was as follows:
| Year Ended December 31,
(in thousands) | 2023 |  | 2022 |  | 2021
U.S. | $ | 303,337 |  |  | $ | 409,666 |  |  | $ | 355,408 |
Outside the U.S. | 33,619 |  |  | 27,140 |  |  | 21,084 |
Income before income taxes | $ | 336,956 |  |  | $ | 436,806 |  |  | $ | 376,492 |
The provision for income taxes, classified by the timing and the location of payment, was as follows:
| Year Ended December 31,
(in thousands) | 2023 |  | 2022 |  | 2021
Current tax expense |  |  |  |  |
Federal | $ | 60,493 |  |  | $ | 103,275 |  |  | $ | 71,573 |
State | 16,890 |  |  | 20,068 |  |  | 15,605 |
Foreign | 1,593 |  | 2,331 |  |  | 1,041 |
Deferred tax (benefit) expense |  |  |  |  |
Federal | (2,022) |  |  | (18,974) |  |  | (2,690) |
State | (1,874) |  |  | (4,163) |  |  | (1,254) |
Foreign | 3,369 |  |  | 2,117 |  |  | 3,260 |
Income tax expense | $ | 78,449 |  |  | $ | 104,654 |  |  | $ | 87,535 |
The net deferred tax assets were as follows:
| December 31,
(in thousands) | 2023 |  | 2022
Deferred tax assets: |  |  |
Accrued compensation | $ | 18,325 |  |  | $ | 17,044 |
Deferred revenue | 30,007 |  |  | 46,758 |
Receivable, net | 12,460 |  |  | 8,599 |
Tax credits | 19,194 |  |  | 16,379 |
Operating lease liabilities | 28,673 |  |  | 19,715 |
Partnership interests | 5,516 |  |  | 3,948 |
Foreign net operating losses | 7,564 |  |  | 8,245 |
Non-U.S. intellectual property | 15,149 |  |  | 17,642 |
Other | 6,588 |  |  | 5,589 |
Total gross deferred tax assets | 143,476 |  |  | 143,919 |
Less: Valuation allowance | (24,228) |  |  | (21,402) |
Deferred tax assets | $ | 119,248 |  |  | $ | 122,517 |
Deferred tax liabilities: |  |  |
Property, equipment and intangible assets | $ | (5,605) |  |  | $ | (15,585) |
Operating lease ROU assets | (21,379) |  |  | (17,703) |
Other | (2,729) |  |  | (1,047) |
Deferred tax liabilities | (29,713) |  |  | (34,335) |
Net deferred tax assets | $ | 89,535 |  |  | $ | 88,182 |
The Company assesses all positive and negative evidence to estimate whether sufficient future taxable income will be generated to use its deferred tax assets. Based on this evaluation, the Company recorded a net change to its valuation allowance of $2.8 million due to state tax credits. The Company has $19.2 million of state income tax credit carryforwards. It is unlikely that we will realize these benefits. Accordingly, the Company has provided a full valuation allowance against these carryforwards. The Company has also provided a tax-effected valuation allowance of $5.0 million on its foreign deferred tax assets because the Company believes that it is unlikely that we will realize some of these benefits. As of December 31, 2023, the Company had gross foreign net operating losses ("NOLs") of $28.5 million, all of which have indefinite carryforward lives. The Company has recorded a tax-effected valuation allowance of $2.0 million for these NOLs, primarily related to France and India. In addition, the Company has a Dutch deferred tax asset of $15.2 million, for which it has recorded a valuation allowance of $3.0 million. The Dutch valuation allowance did not change during the year ended December 31, 2023. The following table presents a reconciliation of the statutory United States federal income tax rate to the effective income tax rate for continuing operations:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
Statutory U.S. federal income tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes, net of federal tax benefit | 3.2 | % |  | 3.0 | % |  | 3.1 | %
Benefits related to foreign operations | 0.3 | % |  | 0.1 | % |  | (0.2) | %
Expenses (benefits) related to compensation, net | 1.0 | % |  | 1.0 | % |  | 0.5 | %
Unrecognized tax positions | 0.5 | % |  | 0.2 | % |  | 0.2 | %
International Reorganization | — | % |  | — | % |  | 1.1 | %
Tax credits | (2.4) | % |  | (1.5) | % |  | (1.8) | %
Valuation allowance | 0.6 | % |  | 0.5 | % |  | (0.2) | %
Other | (0.9) | % |  | (0.3) | % |  | (0.4) | %
Effective income tax rate | 23.3 | % |  | 24.0 | % |  | 23.3 | %
The Company's effective income tax rates from continuing operations were 23.3%, 24.0%, and 23.3% for the years ended December 31, 2023, 2022, and 2021, respectively. The effective income tax rates for the years ended December 31, 2023, 2022, and 2021 were higher than the U.S. federal income tax rate of 21.0% primarily due to state income taxes and tax expense related to compensation, partially offset by federal income tax credits. The effective income tax rate for the year ended December 31, 2021 was also higher due to a reduction in the net carrying value of its Dutch deferred tax asset as a result of an international reorganization. For the years ended December 31, 2023, 2022, and 2021, the Company’s gross unrecognized tax benefits totaled $13.4 million, $11.9 million, and $11.1 million, respectively. After considering the deferred income tax accounting impact, it is expected that approximately $8.4 million of the total as of December 31, 2023 would reduce the effective income tax rate if resolved in the Company’s favor. The following table presents a reconciliation of the beginning and ending amounts of the unrecognized tax benefits:
(in thousands) | 2023 |  | 2022 |  | 2021 |
Balance, January 1 | $ | 11,876 |  |  | $ | 11,147 |  |  | $ | 10,193 |  |
Changes for tax positions of prior years | 2,338 |  |  | (31) |  |  | 156 |  |
Increases for tax positions related to the current year | 1,670 |  |  | 1,650 |  |  | 1,618 |  |
Settlements and lapsing of statutes of limitations | (2,450) |  |  | (890) |  |  | (820) |  |
Balance, December 31 | $ | 13,434 |  |  | $ | 11,876 |  |  | $ | 11,147 |  |
It is reasonably possible that the Company’s unrecognized tax benefits could decrease within the next 12 months by as much as $8.1 million due to settlements and the expiration of applicable statutes of limitations. The Company's federal income tax returns for tax years 2015 and 2016 are currently under examination by the Internal Revenue Service for a tax credit refund claim. The Company's federal income tax returns for the 2017 and 2018 tax years are also under examination by the Internal Revenue Service. Further, the Company's federal income tax returns for the 2020, 2021, 2022 and 2023 tax years are subject to examination by the Internal Revenue Service. The Company's policy is to recognize interest and penalties related to income tax matters in the provision for income taxes. The Company did not incur any material interest or penalties during the years ended December 31, 2023, 2022, and 2021. The Company had $0.1 million and $0.3 million of accrued interest and penalties as of December 31, 2023 and 2022, respectively. The Tax Cuts and Jobs Act subjects a U.S. shareholder to a minimum tax on “global intangible low-taxed income” (“GILTI”) earned by certain foreign subsidiaries. The Company's policy is to recognize the tax expense on GILTI as an expense in the period that the tax is incurred. The Company has incurred tax on GILTI for the year ended December 31, 2023.

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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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