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Income Taxes and Related Payments (Tables)

12 Months Ended

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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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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