XML 34 R19.htm IDEA: XBRL DOCUMENT
v3.22.0.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Provision for income taxes consisted of the following (in thousands):
| Years ended December 31,
| 2021 |  | 2020 |  | 2019
Current |  |  |  |  |
Federal | $ | 22,801 |  |  | $ | 43,572 |  |  | $ | 9,035 |
State | 11,605 |  |  | 19,155 |  |  | 5,925 |
| 34,406 |  |  | 62,727 |  |  | 14,960 |
Deferred |  |  |  |  |
Federal | (3,794) |  |  | (4,963) |  |  | (3,508) |
State | (2,158) |  |  | (1,657) |  |  | (3,285) |
| (5,952) |  |  | (6,620) |  |  | (6,793) |
Total provision for income taxes | $ | 28,454 |  |  | $ | 56,107 |  |  | $ | 8,167 |
The Company uses the liability method of accounting for income taxes as set forth in ASC 740. Under the liability method, deferred taxes are determined based on differences between the financial statement and tax bases of assets and liabilities using enacted tax rates. As of December 31, 2021, the Company had federal and California net operating loss carryforwards of approximately $97.9 million and $120.8 million, respectively. The federal and California net operating loss carryforwards will expire at various dates from 2027 through 2040; however, $77.7 million of the federal operating loss do not expire and can be carried forward indefinitely. Pursuant to Internal Revenue Code Sections 382 and 383, use of the Company’s net operating loss and credit carryforwards may be limited if a cumulative change in ownership of more than 50% occurs within any three years’ period since the last ownership change. Significant components of the Company’s deferred tax assets (liabilities) as of December 31, 2021 and 2020 are shown below (in thousands). A valuation allowance of $22.4 million and $15.5 million as of December 31, 2021 and 2020, respectively, has been established against the Company’s deferred tax assets related to loss entities the Company cannot consolidate under the federal consolidation rules, as realization of these assets is uncertain. Valuation allowance increased by $6.8 million in 2021.
| 2021 |  | 2020
Deferred tax assets |  |  |
State taxes | $ | 2,379 |  |  | $ | 3,932 |
Stock options | — |  |  | 461 |
Accrued expenses | 1,864 |  |  | 3,905 |
Allowance for bad debts | 153 |  |  | 351 |
Investment in other entities | 3,289 |  |  | 702 |
Net operating loss carryforward | 28,992 |  |  | 20,758 |
Lease liability | 4,208 |  |  | 4,979 |
Unrealized Gain | 3,007 |  |  | — |
Other | 705 |  |  | 665 |
Deferred tax assets before valuation allowance | 44,597 |  |  | 35,753 |
Valuation allowance | (22,351) |  |  | (15,517) |
Net deferred tax assets | 22,246 |  |  | 20,236 |
Deferred tax liabilities |  |  |
Property and equipment | (777) |  |  | (661) |
Acquired intangible assets | (23,763) |  |  | (24,661) |
Stock options | (1,641) |  |  | — |
Right-of-use assets | (4,117) |  |  | (4,888) |
Debt issuance cost | (988) |  |  | — |
481(a) adjustment | (87) |  |  | (985) |
Deferred tax liabilities | (31,373) |  |  | (31,195) |
Net deferred liabilities | $ | (9,127) |  |  | $ | (10,959) |
The provision for income taxes differs from the amount computed by applying the federal income tax rate as follows for the years ended December 31:
| Years ended December 31,
| 2021 |  | 2020 |  | 2019
Tax provision at U.S. federal statutory rates | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes net of federal benefit | 7.8 |  |  | 7.7 |  |  | 8.1 |
Non-deductible permanent items | 3.7 |  |  | 0.3 |  |  | 3.3 |
Variable interest entities | (1.3) |  |  | (0.2) |  |  | (2.7) |
Stock-based compensation | (1.0) |  |  | 0.3 |  |  | (1.5) |
Change in valuation allowance | 8.9 |  |  | 3.2 |  |  | 3.2 |
Investment basis adjustment | (2.1) |  |  | — |  |  | — |
Other | — |  |  | (1.0) |  |  | 0.2 |
Effective income tax rate | 36.9 | % |  | 31.3 | % |  | 31.6 | %
The Company’s effective tax rate is different from the federal statutory rate of 21% due primarily to state taxes, change in valuation allowance, and permanent adjustments. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (“CARES”) Act was enacted and signed into law. The CARES Act, among other things, permits net operating loss carryovers and carrybacks and modifications on the limitation of business interests. As of December 31, 2021, the Company does not expect the CARES Act to result in any material impact on the Company’s effective tax rate. As of December 31, 2021 and 2020, the Company does not have any unrecognized tax benefits related to various federal and state income tax matters. The Company will recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense. The Company is subject to U.S. federal income tax, as well as income tax in California. The Company and its subsidiaries’ state and federal income tax returns are open to audit under the statute of limitations for the years ended December 31, 2017 through December 31, 2020 and for the years ended December 31, 2018 through December 31, 2020, respectively. The Company does not anticipate material unrecognized tax benefits within the next 12 months.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration