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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 provision for income tax attributable to income before income taxes consisted of (in thousands):
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
Current: |  |  |  |  |
Federal | $ | 97,436 |  |  | $ | 142,045 |  |  | $ | 130,700 |
State | 23,873 |  |  | 26,513 |  |  | 35,266 |
Total current taxes | 121,309 |  |  | 168,558 |  |  | 165,966 |
Deferred: |  |  |  |  |
Federal | (5,926) |  |  | 8,812 |  |  | (8,771) |
State | 2,781 |  |  | 13,433 |  |  | (800) |
Total deferred taxes | (3,145) |  |  | 22,245 |  |  | (9,571) |
Total income tax expense | $ | 118,164 |  |  | $ | 190,803 |  |  | $ | 156,395 |
The Company’s provision for income taxes was different from the amount computed by applying the statutory federal income tax rate of 21% to the underlying income before income taxes as a result of the following (in thousands):
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
Taxes at the U.S. federal statutory rate | $ | 98,122 |  |  | $ | 162,371 |  |  | $ | 131,373 |
State income taxes, net of federal tax impact | 20,138 |  |  | 32,262 |  |  | 27,234 |
Non-deductible transaction costs | — |  |  | 49 |  |  | 136 |
Federal energy credits | (3,760) |  |  | (5,487) |  |  | (5,429) |
Other, net | 3,664 |  |  | 1,608 |  |  | 3,081 |
Total income tax expense | $ | 118,164 |  |  | $ | 190,803 |  |  | $ | 156,395 |
Effective income tax rate | 25.3 | % |  | 24.7 | % |  | 25.0 | %
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax basis, and for operating loss and tax credit carryforwards. Deferred taxes consisted of the following at December 31, 2023 and 2022 (in thousands):
| Year Ended December 31,
| 2023 |  | 2022
Deferred tax assets: |  |  |
Impairment and other valuation reserves | $ | 16,733 |  |  | $ | 21,832 |
Incentive compensation | 11,512 |  |  | 9,923 |
Indirect costs capitalized | 19,857 |  |  | 13,204 |
Operating lease liability | 19,401 |  |  | 19,413 |
Net operating loss carryforwards (state) | — |  |  | 1,629 |
State taxes | 5,092 |  |  | 5,699 |
Other costs and expenses | 10,851 |  |  | 12,524 |
Gross deferred tax assets | 83,446 |  |  | 84,224 |
Valuation allowance | (3,372) |  |  | (3,413) |
Deferred tax assets, net of valuation allowance | 80,074 |  |  | 80,811 |
Deferred tax liabilities: |  |  |
Interest capitalized | (3,355) |  |  | (5,340) |
Basis difference in inventory | (5,302) |  |  | (5,523) |
Fixed assets | (12,896) |  |  | (14,281) |
Intangibles | (4,200) |  |  | (4,227) |
Operating lease asset | (15,847) |  |  | (15,883) |
Deferred financing costs | (394) |  |  | (507) |
Other | (84) |  |  | (199) |
Deferred tax liabilities | (42,078) |  |  | (45,960) |
Net deferred tax assets | $ | 37,996 |  |  | $ | 34,851 |
The Company accounts for income taxes in accordance with ASC 740, which requires an asset and liability approach for measuring deferred taxes based on temporary differences between the financial statements and tax bases of assets and liabilities using enacted tax rates for the years in which taxes are expected to be paid or recovered. Each quarter we assess our deferred tax asset to determine whether all or any portion of the asset is more likely than not unrealizable under ASC 740. We are required to establish a valuation allowance for any portion of the asset we conclude is more likely than not to be unrealizable. Our assessment considers, among o ther things, the nature, frequency and severity of our current and cumulative losses, forecasts of our future taxable income, the duration of statutory carryforward periods and tax planning alternatives. As of December 31, 2023, the Company did not have any federal or state net operating loss carryforwards. As of December 31, 2023 and 2022, we had a valuation allowance on our deferred tax assets of $3.4 million. The valuation allowance as of December 31, 2023 and 2022 primarily related to an impairment of our investment in an unconsolidated joint venture that, if dissolved, would result in a capital loss, the realization of which is uncertain. The Company will continue to evaluate both positive and negative evidence in determining the need for a valuation allowance against its deferred tax assets. Changes in positive and negative evidence, including differences between the Company’s future operating results and the estimates utilized in the determination of the valuation allowance, could result in changes in the Company’s estimate of the valuation allowance against its deferred tax assets. The accounting for deferred taxes is based upon estimates of future results. Differences between the anticipated and actual outcomes of these future results could have a material impact on the Company’s consolidated results of operations or financial position. Also, changes in existing federal and state tax laws and tax rates could affect future tax results and the valuation allowance against the Company’s deferred tax assets. The Company files income tax returns in the U.S., including federal and multiple state and local jurisdictions. The Company’s tax years 2019 to 2022 will remain open to examination by the federal and state authorities for three and four years, respectively, from the date of utilization of any net operating loss or credit carryforwards. Unrecognized tax benefits represent potential future obligations to taxing authorities if uncertain tax positions we have taken on previously filed tax returns are not sustained. These amounts represent the gross amount of exposure in individual jurisdictions and do not reflect any additional benefits expected to be realized if such positions were not sustained, such as federal deduction that could be realized if an unrecognized state deduction was not sustained. We did not have any unrecognized tax benefits as of December 31, 2023 and 2022. The Company classifies interest and penalties related to unrecognized tax benefits as part of income tax expense. The Company did not record any income tax expense for interest and penalties on uncertain tax positions during the years ended December 31, 2023, 2022 and 2021.

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