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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

NOTE 7. Income Taxes

The following is a reconciliation of our effective tax rate to the federal statutory tax rate:

 

Years Ended December 31,

 

 

 

2024

 

 

2023

 

 

2022

 

 

U.S. federal statutory rate

 

21.0

 

%

 

21.0

 

%

 

21.0

 

%

State taxes, net of federal benefit

 

1.9

 

 

 

0.3

 

 

 

3.4

 

 

Federal and state incentives

 

(1.1

)

 

 

(1.7

)

 

 

(0.8

)

 

Unrecognized tax benefits

 

(1.2

)

 

 

(0.2

)

 

 

0.8

 

 

Valuation allowance for deferred taxes

 

1.3

 

 

 

(0.1

)

 

 

(0.7

)

 

State law changes

 

0.1

 

 

 

0.1

 

 

 

(0.2

)

 

Benefit of stock-based compensation

 

(1.3

)

 

 

(0.6

)

 

 

(0.4

)

 

Nondeductible executive compensation

 

1.6

 

 

 

1.2

 

 

 

0.7

 

 

Other

 

(0.8

)

 

 

(0.1

)

 

 

(0.1

)

 

Net effective rate

 

21.5

 

%

 

19.9

 

%

 

23.7

 

%

 

The following is a summary of our provision for income taxes (in thousands):

 

Years Ended December 31,

 

 

2024

 

 

2023

 

 

2022

 

Current

 

 

 

 

 

 

 

 

    Federal

$

39,685

 

 

$

34,951

 

 

$

85,831

 

    State and local

 

(749

)

 

 

(1,191

)

 

 

25,162

 

    Foreign

 

46

 

 

 

55

 

 

 

32

 

 

 

38,982

 

 

 

33,815

 

 

 

111,025

 

 

 

 

 

 

 

 

 

 

Deferred

 

 

 

 

 

 

 

 

    Federal

 

(13,385

)

 

 

8,305

 

 

 

7,366

 

    State and local

 

3,041

 

 

 

(432

)

 

 

(7,388

)

    Foreign

 

(135

)

 

 

(12

)

 

 

7

 

 

 

(10,479

)

 

 

7,861

 

 

 

(15

)

 

 

 

 

 

 

 

 

 

              Total provision

$

28,503

 

 

$

41,676

 

 

$

111,010

 

The following is a summary of our deferred tax assets and liabilities (in thousands):

 

December 31,

 

 

2024

 

 

2023

 

Accrued compensation

 

11,860

 

 

 

9,884

 

Claims reserves

 

10,671

 

 

 

10,875

 

Capitalized research and development expenses

 

8,517

 

 

 

4,823

 

Other reserves

 

12,489

 

 

 

16,362

 

Tax credit carryforwards

 

4,461

 

 

 

6,533

 

Operating loss carryforwards

 

139

 

 

 

151

 

Lease accounting liability

 

63,639

 

 

 

44,440

 

Total gross deferred income taxes

 

111,776

 

 

 

93,068

 

Valuation allowances

 

(2,921

)

 

 

(1,174

)

Total deferred tax assets

 

108,855

 

 

 

91,894

 

 

 

 

 

 

 

Prepaids

 

(5,901

)

 

 

(6,444

)

Property and equipment

 

(139,077

)

 

 

(153,790

)

Intangibles

 

(55,386

)

 

 

(53,759

)

Lease right-of-use asset

 

(61,404

)

 

 

(41,668

)

Total deferred tax liabilities

 

(261,768

)

 

 

(255,661

)

 

 

 

 

 

 

        Net deferred tax liability

$

(152,913

)

 

$

(163,767

)

 

We are subject to income taxation in the United States, numerous state jurisdictions, Mexico, Canada, and India. Because income tax return formats vary among the states, we file both unitary and separate company state income tax returns. We do not permanently reinvest our foreign earnings, all amounts are accrued and accounted for, though not material.

Our state tax net operating losses total $0.1 million. Some of those state losses have no expiration date while others will expire between December 31, 2028, and December 31, 2044. Management believes it is more likely than not that the loss carryforward deferred tax assets will be fully realized.

Our federal incentive tax credit carryforward of $0.1 million expires between December 31, 2025 and December 31, 2028. Our state incentive tax credit carryforwards of $5.5 million expire between December 31, 2025 and December 31, 2027. Management believes it is more likely than not that approximately $1.9 million of the incentive carryforward deferred tax assets will be realized and a valuation allowance of $3.7 million has been established for the remainder which are not expected to be realized.

As of December 31, 2024 and December 31, 2023, the amount of unrecognized tax benefits was $9.1 million and $12.9 million, respectively. If recognized, these benefits would decrease our income tax provision by $7.2 million and $10.2 million, respectively. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

 

2024

 

 

2023

 

Gross unrecognized tax benefits - beginning of the year

$

12,859

 

 

$

11,116

 

Gross decreases related to prior year tax positions

 

(4,232

)

 

 

-

 

Gross increases related to prior year tax positions

 

-

 

 

 

761

 

Gross increases related to current year tax positions

 

1,378

 

 

 

1,460

 

Decreases related to settlements with tax authorities

 

(788

)

 

 

-

 

Lapse of applicable statute of limitations

 

(123

)

 

 

(478

)

Gross unrecognized tax benefits - end of year

$

9,094

 

 

$

12,859

 

We recognize interest and penalties related to income tax liabilities in our provision for income taxes. In 2024, we included $0.1 million in our provision for income taxes.

The Inflation Reduction Act of 2022 (IRA) was signed into law on August 16, 2022, and the CHIPS and Science Act of 2022 (CHIPS Act) was signed into law on August 9, 2022. These laws implemented new tax provisions, primarily a 15% corporate alternative minimum tax and a nondeductible 1% excise tax on the fair market value of stock repurchased by publicly traded corporations. In 2024, we paid approximately $1.6 million in excise taxes related to stock repurchases. The two acts also provide various tax credits, several of which are transferable or refundable, for the investment in or production of clean-energy effective January 1, 2023.