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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income tax provision (benefit) is summarized as follows:
| Year Ended December 31,
(In thousands) | 2022 |  | 2021 |  | 2020
Current: |  |  |  |  |
Federal | $ | 13,877 |  |  | $ | — |  |  | $ | (371) |
State | 274 |  |  | 95 |  |  | — |
Total current tax provision (benefit) | $ | 14,151 |  |  | $ | 95 |  |  | $ | (371) |
Deferred: |  |  |  |  |
Federal | $ | (13,462) |  |  | $ | 325 |  |  | $ | 430 |
State | (168) |  |  | 16 |  |  | 2 |
Total deferred tax (benefit) provision | (13,630) |  |  | 341 |  |  | 432 |
Income tax provision | $ | 521 |  |  | $ | 436 |  |  | $ | 61 |
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,
| 2022 |  | 2021 |  | 2020
Statutory federal tax rate | 21.00 | % |  | 21.00 | % |  | 21.00 | %
State income taxes, net of federal income taxes | 0.62 |  |  | 1.41 |  |  | 0.89 |
Permanent tax differences – stock compensation | (6.31) |  |  | (3.93) |  |  | (0.43) |
Permanent tax differences – business meals | 0.44 |  |  | 0.23 |  |  | (0.07) |
Permanent tax differences – executive compensation and other | 9.27 |  |  | 2.13 |  |  | (0.86) |
Change in valuation allowance | (23.99) |  |  | (19.69) |  |  | (19.09) |
FICA credit generated | (1.09) |  |  | (0.28) |  |  | 0.33 |
Change in tax rate and apportionment | (0.26) |  |  | (0.03) |  |  | 0.11 |
Deferred only adjustment to beginning deferred balances | 0.95 |  |  | (0.57) |  |  | (1.92) |
Effective tax rate | 0.63 | % |  | 0.27 | % |  | (0.04) | %
The Company’s current and non-current deferred tax assets (liabilities) are comprised of the following:
| December 31,
(In thousands) | 2022 |  | 2021
Deferred tax assets: |  |  |
Accruals and reserves | $ | 6,350 |  |  | $ | 7,688 |
Share-based compensation expense | 966 |  |  | 5,781 |
General business credit carryforward | — |  |  | 489 |
State tax credits | 3,867 |  |  | 4,192 |
Net operating loss carryforwards | 753 |  |  | 6,076 |
Operating lease obligation | 36,483 |  |  | 41,877 |
Depreciation of fixed assets | 6,532 |  |  | 4,875 |
Other | 493 |  |  | 545 |
| 55,444 |  |  | 71,523 |
Valuation allowances | (5,680) |  |  | (30,783) |
| $ | 49,764 |  |  | $ | 40,740 |
Deferred tax liabilities: |  |  |
Prepaid services | $ | (2,116) |  |  | $ | (3,282) |
Amortization of intangible assets | (2,895) |  |  | (941) |
Right-of-use assets | (32,984) |  |  | (38,378) |
| (37,995) |  |  | (42,601) |
Net deferred tax assets (liabilities) | $ | 11,769 |  |  | $ | (1,861) |
Non-current deferred tax assets | $ | 11,822 |  |  | $ | — |
Non-current deferred tax liabilities | (53) |  |  | (1,861) |
Net deferred tax assets (liabilities) | $ | 11,769 |  |  | $ | (1,861) |
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, 2022 include a net decrease in valuation allowance of $25.1 million. During the first quarter of 2022, the Company concluded that it was more likely than not that the Company would generate sufficient taxable income within the applicable net operating loss carry-forward periods to realize a portion of its deferred tax assets, which resulted in a partial reversal of the deferred tax asset valuation allowance. As of December 31, 2022, the Company had $70.5 million of Maryland net operating loss carryforwards (“NOLs”), 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. Additionally, the Company had deferred tax assets of $3.9 million related to Maryland tax credits. The Maryland credit carryforward begins to expire in 2029. Maryland NOLs and credits have been reduced by a full valuation allowance. As of December 31, 2022, the Company’s 2017 and 2018 federal tax returns were under audit by the IRS. As of December 31, 2022, the Company had no material uncertain tax positions.

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- 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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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