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Income Taxes and Related Payments (Tables) | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Components of the provision for income taxes | Components of the provision for income taxes consist of the following:
| For the Years Ended December 31,
Current: | 2022 |  | 2021 |  | 2020
Federal | $ | 25,903 |  |  | $ | 53,131 |  |  | $ | 24,116 |
State and local | 6,870 |  |  | 14,990 |  |  | 8,174 |
Foreign | 521 |  |  | 523 |  |  | 515 |
Total | 33,294 |  |  | 68,644 |  |  | 32,805 |
Deferred: |  |  |  |  |
Federal | 25,670 |  |  | 32,655 |  |  | 27,110 |
State and local | 4,486 |  |  | 5,727 |  |  | 880 |
Total | 30,156 |  |  | 38,382 |  |  | 27,990 |
Income tax expense | $ | 63,450 |  |  | $ | 107,026 |  |  | $ | 60,795 |
Reconciliation of effective tax rate | The provision for income taxes differs from the amount of income tax computed by applying the applicable U.S. statutory federal income tax rate to income before provision for income taxes as follows:
| For the Years Ended December 31,
| 2022 |  | 2021 |  | 2020
U.S. federal statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State and local taxes, net of federal tax effect | 3.7 |  |  | 3.5 |  |  | 3.1 |
Excess tax benefits on share-based compensation | (1.7) |  |  | (1.4) |  |  | (1.1) |
Rate benefit from the flow through entity | (2.8) |  |  | (4.1) |  |  | (5.5) |
Change in state tax rate | — |  |  | — |  |  | (1.1) |
Unrecognized tax benefits | (0.1) |  |  | — |  |  | 0.2 |
Other | 0.2 |  |  | 0.4 |  |  | (0.1) |
Effective tax rate | 20.3 | % |  | 19.4 | % |  | 16.5 | %
Schedule of DTA and TRA Payable | The change in the Company’s deferred tax assets related to the tax benefits described above and the change in corresponding amounts payable under the TRAs for the years ended December 31, 2022 and 2021 is summarized as follows:
| Deferred Tax Asset - Amortizable Basis |  | Amounts Payable Under Tax Receivable Agreements
December 31, 2020 | $ | 446,954 |  |  | $ | 412,468 |
2021 Follow-On Offering | 16,362 |  |  | 13,908 |
2021 Holdings Common Unit Exchanges | 36,069 |  |  | 30,659 |
Amortization | (39,483) |  |  | — |
Payments under TRAs (1) | — |  |  | (31,250) |
Change in estimate | (9) |  |  | (358) |
December 31, 2021 | $ | 459,893 |  |  | $ | 425,427 |
2022 Holdings Common Unit Exchanges | 8,687 |  |  | 7,384 |
Amortization | (42,122) |  |  | — |
Payments under TRAs (1) | — |  |  | (33,109) |
Change in estimate | 10 |  |  | (913) |
December 31, 2022 | $ | 426,468 |  |  | $ | 398,789 |
(1) Interest payments of $0.1 million and less than $0.1 million were paid in addition to these TRA payments for the years ended 2022 and 2021, respectively.
Components of deferred tax assets | Net deferred tax assets comprise the following:
Deferred tax assets: | As of December 31, 2022 |  | As of December 31, 2021
Amortizable basis (1) | $ | 426,468 |  |  | $ | 459,893 |
Other (2) | 50,556 |  |  | 38,009 |
Total deferred tax assets | 477,024 |  |  | 497,902 |
Less: valuation allowance (3) | — |  |  | — |
Net deferred tax assets | $ | 477,024 |  |  | $ | 497,902 |
(1) Represents the unamortized step-up of tax basis and other tax attributes from the merger and partnership unit sales and exchanges described above. These future tax benefits are subject to the TRA agreements.
(2) Represents the net deferred tax assets associated with Artisan’s investment in Holdings, related primarily to incentive compensation plan deduction timing differences. These future tax benefits are not subject to the TRA agreements.
(3) Artisan assessed whether the deferred tax assets would be realizable and determined based on its history of taxable income that the benefits would more likely than not be realized. Accordingly, no valuation allowance is required.
Schedule of Unrecognized Tax Benefits Roll Forward | The change in the Company’s gross unrecognized tax benefits for the years ended December 31, 2022, 2021 and 2020 is summarized as follows:
| For the Years Ended December 31,
| 2022 |  | 2021 |  | 2020
Balance at beginning of year | $ | 1,085 |  |  | $ | 1,085 |  |  | $ | 1,667 |
Additions for tax positions of prior years | 117 |  |  | — |  |  | 1,187 |
Reductions for tax positions of prior years | (476) |  |  | — |  |  | (613) |
Tax positions related to the current year | 30 |  |  | — |  |  | 216 |
Settlements with taxing authorities | (609) |  |  | — |  |  | (1,372) |
Expirations of statute of limitations | — |  |  | — |  |  | — |
Balance at end of year | $ | 147 |  |  | $ | 1,085 |  |  | $ | 1,085 |
If recognized, $0.1 million and $1.0 million of the benefits (expense) recorded as of December 31, 2022 and 2021, respectively, would favorably (unfavorably) impact the effective tax rate in future periods. The total amount of unrecognized tax benefits is currently not expected to significantly increase or decrease within the next twelve months. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of the income tax provision. Accrued interest on uncertain tax positions was less than $0.1 million and $0.2 million as of December 31, 2022 and 2021, respectively, and is excluded from the unrecognized tax benefits total above. The gross unrecognized tax benefit is recorded within accounts payable, accrued expenses, and other in the Company's Consolidated Statements of Financial Condition.

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