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Income Taxes
 12 Months Ended
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)202220212020
Current:
Federal$13,877 $— $(371)
State274 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,
202220212020
Statutory federal tax rate21.00 %21.00 %21.00 %
State income taxes, net of federal income taxes0.62 1.41 0.89 
Permanent tax differences – stock compensation(6.31)(3.93)(0.43)
Permanent tax differences – business meals0.44 0.23 (0.07)
Permanent tax differences – executive compensation and other9.27 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 balances0.95 (0.57)(1.92)
Effective tax rate0.63 %0.27 %(0.04)%
The Company’s current and non-current deferred tax assets (liabilities) are comprised of the following:
December 31,
(In thousands)20222021
Deferred tax assets:
Accruals and reserves$6,350 $7,688 
Share-based compensation expense966 5,781 
General business credit carryforward— 489 
State tax credits3,867 4,192 
Net operating loss carryforwards753 6,076 
Operating lease obligation36,483 41,877 
Depreciation of fixed assets6,532 4,875 
Other493 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.