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Income Taxes
 3 Months Ended
Mar. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

Note 17. Income Taxes

The effective tax rate was a negative 3.5% for the three months ended March 31, 2024 and 2.6% for the three months ended March 31, 2023.

The income tax provision was computed based on our estimated annualized effective tax rate and the full-year forecasted income or loss plus the tax impact of unusual, infrequent, or nonrecurring significant items during the period. The amount and change of pre-tax income and loss recognized between jurisdictions impacted the reported effective tax rate for the three months ended March 31, 2024 as we do not recognize a tax benefit on losses in the United States and other European countries where we have a valuation allowance, while recognizing tax expense in Canada, Netherlands, the Middle East, the United Kingdom, and Iceland. We included in the annualized effective rate a $1.1 million benefit for the release of the valuation allowance recorded on the United Kingdom’s tax loss carryforwards as the United Kingdom’s forecasted income will fully utilize these carryforward losses for the year. We also recorded a $0.5 million expense to record estimated withholding taxes associated with repatriating all of Sky Lagoon’s earnings back to the United States and a valuation allowance against the tax credit generated from this withholding tax.

During the three months March 31, 2023, we released a valuation allowance of $2.1 million that was recorded on deferred tax assets associated with certain separate states, which more than offset taxes due in jurisdictions without a valuation allowance.

We paid net cash for income taxes of $7.8 million during the three months ended March 31, 2024, of which $6.2 million was paid to Canadian taxing authorities and $1.2 million to the Netherlands. We paid net cash for income taxes of $8.0 million during the three months ended March 31, 2023 of which $7.3 million was paid to Canadian taxing authorities.