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Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income tax provision (benefit) is summarized as follows:
Year Ended December 31,
(In thousands)202120202019
Current:
Federal$— $(371)$(371)
State95 — — 
Total current tax benefit$95 $(371)$(371)
Deferred:
Federal$325 $430 $(1,475)
State16 2 (30)
Total deferred tax provision (benefit)341 432 (1,505)
Income tax provision (benefit)$436 $61 $(1,876)
Reconciliation of the statutory federal income tax rate to the Company’s actual rate based on income (loss) before income tax provision (benefit) is summarized below:
Year Ended December 31,
202120202019
Statutory federal tax rate21.00 %21.00 %21.00 %
State income taxes, net of federal income taxes1.41 0.89 1.20 
Permanent tax differences – stock compensation(3.93)(0.43)(0.70)
Permanent tax differences – business meals0.23 (0.07)(0.90)
Permanent tax differences – executive compensation and other2.13 (0.86)— 
Purchase price allocation adjustment – merger— — 5.90 
Change in valuation allowance(19.69)(19.09)(32.30)
FICA credit generated(0.28)0.33 2.80 
Impact of ASC 842— — 7.70 
Change in tax rate and apportionment(0.03)0.11 (0.30)
Deferred only adjustment to beginning deferred balances(0.57)(1.92)0.10 
Effective tax rate0.27 %(0.04)%4.50 %
The Company’s current and non-current deferred tax assets (liabilities) are comprised of the following:
December 31,
(In thousands)20212020
Deferred tax assets:
Accruals and reserves$7,688 $4,315 
Share-based compensation expense5,781 5,469 
General business credit carryforward489 4,500 
State tax credits4,192 5,500 
Net operating loss carryforwards6,076 42,146 
Operating lease obligation41,877 42,039 
Amortization of intangible assets— 1,073 
Depreciation of fixed assets4,875 — 
Other545 647 
71,523 105,689 
Valuation allowances(30,783)(62,724)
$40,740 $42,965 
Deferred tax liabilities:
Prepaid services$(3,282)$(715)
Amortization of intangible assets(941)— 
Depreciation of fixed assets— (5,104)
Right-of-use assets(38,378)(38,666)
(42,601)(44,485)
Net deferred tax liabilities$(1,861)$(1,520)
Deferred tax assets are evaluated by considering historical levels of income, estimates of future taxable income and the impact of tax planning strategies. The Company’s financial results for the year ended December 31, 2021 include a net decrease in valuation allowance of $31.9 million. The Company has performed a continuing evaluation of its deferred tax asset valuation allowance on a quarterly basis. The Company concluded that, as of December 31, 2021, negative evidence outweighs positive evidence for the realization of deferred tax assets and as a result has provided a full valuation allowance against its net deferred tax assets. The Company may reverse some or all of its valuation allowance against its net deferred tax assets in future periods to the extent it becomes more likely than not that the deferred tax assets will be realized.
As of December 31, 2021, the Company had $25.7 million of federal net operating loss carryforwards, which do not expire. These net operating losses have the potential to be used to offset future ordinary taxable income and reduce future cash tax liabilities. However, in connection with the acquisition of American Casino and Entertainment Properties LLC (“American”),
the Company issued 4,046,494 shares of its common stock to a former American equity holder, which resulted in an “ownership change” under Section 382 that will generally limit the amount of net operating losses the Company can utilize annually. As of December 31, 2021, the Company has concluded that the acquisition of American will not result in a loss of net operating loss nor credit carryforwards.
Additionally, the Company had deferred tax assets of $0.5 million related to general business credits. The general business credit carryforward begins to expire in 2041.
As of December 31, 2021, the Company’s 2017 and 2018 federal tax returns were under audit by the IRS.
As of December 31, 2021, the Company had no material uncertain tax positions.