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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes
| Years Ended December 31,
| 2024 |  | 2023 |  | 2022
Income before taxes |  |  |  |  |
U.S. | $ | 45,497 |  |  | $ | 69,055 |  |  | $ | 225,640 |
Non-U.S. | 78 |  |  | 168 |  |  | 151 |
| $ | 45,575 |  |  | $ | 69,223 |  |  | $ | 225,791 |
Income taxes Income tax expense (benefit) consists of:
| Years Ended December 31,
| 2024 |  | 2023 |  | 2022
Current Provision (benefit): |  |  |  |  |
Federal | $ | 7,525 |  |  | $ | 20,707 |  |  | $ | 31,165 |
State | 2,865 |  |  | 3,159 |  |  | 6,463 |
Non-U.S. | 23 |  |  | 47 |  |  | 48 |
Total current provision (benefit) | $ | 10,413 |  |  | $ | 23,913 |  |  | $ | 37,676 |
Deferred Provision (benefit): |  |  |  |  |
Federal | $ | (8,192) |  |  | $ | (8,886) |  |  | $ | 13,874 |
State | (795) |  |  | (427) |  |  | 2,355 |
Non-U.S. | — |  |  | — |  |  | — |
Total deferred provision (benefit) | (8,987) |  |  | (9,313) |  |  | 16,229 |
Total income tax expense (benefit) | $ | 1,426 |  |  | $ | 14,600 |  |  | $ | 53,905 |
The U.S. federal statutory income tax rate is reconciled to the effective income tax rate as follows:
| Years Ended December 31,
| 2024 |  | 2023 |  | 2022
U.S. federal statutory income tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
U.S. state income taxes | 3.4 | % |  | 2.9 | % |  | 3.1 | %
U.S. state income tax rate change | 0.2 | % |  | 0.2 | % |  | — | %
Excess tax benefits of equity compensation | — | % |  | (1.5) | % |  | — | %
Executive compensation limitations | 1.8 | % |  | 1.0 | % |  | 0.7 | %
Research and other tax credits | (2.7) | % |  | (1.3) | % |  | (0.3) | %
Energy credits | (21.4) | % |  | — | % |  | — | %
Prior year return to provision adjustments | 2.1 | % |  | (0.4) | % |  | — | %
Foreign derived intangible income deduction | (1.3) | % |  | (0.9) | % |  | (0.7) | %
Other, net | — | % |  | 0.1 | % |  | 0.1 | %
Effective income tax rate | 3.1 | % |  | 21.1 | % |  | 23.9 | %
Generally, the Company's effective income tax rate is increased relative to the U.S. statutory rate of 21% due to state taxes and executive compensation limitations, which are generally offset by research tax credits, excess tax benefits of equity compensation and the foreign derived intangible income deduction. The Company's effective income tax rate for 2024 was significantly less than the U.S. Federal statutory rate of 21% due to approximately $9.7 million in income tax benefits associated with prior year refund claims, specifically related to Internal Revenue Code (IRC) Section 45Q tax credits generated in the 2018 and 2019 tax periods. IRC Section 45Q allows taxpayers to receive a tax credit for carbon capture and utilization at its facilities. For certain utilization projects, the 45Q tax credit requires approval by the Internal Revenue Service (IRS) of a life-cycle assessment ("LCA") prior to claiming the tax credits. The Company received approval for its 2018 LCA in November 2024 which enables the Company to claim credits for the 2018 and 2019 years. The Company continues to pursue credits for the periods subsequent to 2019. The 45Q tax credits for 2018 and 2019 have been recorded as a reduction in the Company's Income taxes payable account. Additionally, in 2024 the Company recorded 2023 return to provision adjustments which resulted in a 2.1% increase in its current year effective income tax rate. These adjustments primarily relate to a reduction in the income tax benefits associated with the research tax credit and the foreign derived intangible income deduction as reported on the Company's 2023 income tax return as compared to amounts recorded in its 2023 Income tax expense. The Company's effective income tax rate for 2023 approximated the U.S. Federal statutory rate of 21%. Increases to the effective income tax rate due primarily to state taxes and executive compensation limitations, were materially offset by research tax credits, excess tax benefits of equity compensation and the foreign-derived intangible income deduction. The Company's effective income tax rate for 2022 was higher compared to the U.S. Federal statutory rate of 21% due primarily to state taxes and executive compensation deduction limitations partially offset by research tax credits and the foreign-derived intangible income deduction. On August 16, 2022, the Inflation Reduction Act of 2022 (the "IRA") was signed into law. This legislation includes significant changes relating to tax, climate change, energy and health care. Among other provisions, the IRA introduces a corporate alternative minimum tax ("CAMT") on adjusted financial statement income of certain large corporations and a 1% excise tax on share repurchases. The Company is not currently subject to the CAMT which became effective for tax years beginning after December 31, 2022. The 1% excise tax is generally applicable to publicly traded corporations for the net value of certain stock that the corporation repurchases during the year and is also effective for tax years beginning after December 31, 2022. The impact of any excise tax imposed on the Company for share repurchases is generally accounted for as an equity transaction with no consequences to the Company's results of operations, and this provision of the law has an immaterial impact on the Company's financial condition. The IRA also includes significant extensions, expansions and enhancements related to climate and energy tax credits designed to encourage investment in the adoption and expansion of renewable and alternative energy sources. The Company continues to evaluate these energy credit provisions of the law in relation to our sustainability and environmental, social and governance initiatives. The Company also continues to monitor any new tax legislation that would result in a material impact on its financial statements, in particular as a result of the new U.S. presidential administration and U.S. Congress. The Pillar Two Global Anti-Base Erosion rules issued by the Organization for Economic Co-operation and Development ("OECD"), a global policy forum, introduced a global minimum tax of 15% which would apply to multinational groups with consolidated financial statement revenue in excess of EUR 750 million. Nearly all OECD member jurisdictions have agreed in principle to adopt these provisions and numerous jurisdictions, including jurisdictions where the Company operates, have enacted these rules effective January 1, 2024. The Company has evaluated the impact of these rules and currently believes they will not have any material impact on financial results through 2026 due to certain transitional safe harbors. We will continue to monitor and refine our assessment as further guidance is made available. As of December 31, 2024 and 2023, there were no unrecognized tax benefits recorded by the Company. Although there are no unrecognized income tax benefits, when applicable, the Company’s policy is to report interest expense and penalties related to unrecognized income tax benefits in the income tax provision. The Company is subject to taxation in the United States and various states and foreign jurisdictions. The Company has been notified that a federal tax examination for periods 2018 and 2019 will commence, and tax periods 2021 through 2024 remain open under the statute of limitations and are subject to examination by the tax authorities. There are no current state or foreign tax examinations; however, tax years 2020 through 2024 generally remain open under the statute of limitations and are subject to examination by the tax authorities. Deferred tax assets (liabilities) The tax effects of temporary differences which give rise to future income tax benefits and expenses are as follows:
| December 31,
| 2024 |  | 2023
Deferred tax assets: |  |  |
Net operating loss | $ | 92 |  |  | $ | 36 |
Accruals and reserves | 4,317 |  |  | 2,943 |
Capitalization of research expenses | 7,787 |  |  | 6,624 |
Inventory | 17,346 |  |  | 9,394 |
Pension obligation | — |  |  | 1,726 |
Operating lease liability | 36,931 |  |  | 23,031 |
Equity compensation | 2,899 |  |  | 3,025 |
Total gross deferred tax assets | 69,372 |  |  | 46,779 |
Less: Valuation Allowance | — |  |  | — |
Total deferred tax assets | $ | 69,372 |  |  | $ | 46,779 |
Deferred tax liabilities: |  |  |
Property, plant & equipment | $ | (163,991) |  |  | $ | (160,071) |
Intangibles | (10,857) |  |  | (11,156) |
Operating lease asset | (36,822) |  |  | (22,981) |
Pension obligation | (421) |  |  | — |
Other | (2,580) |  |  | (3,630) |
Total deferred tax liabilities | (214,671) |  |  | (197,838) |
Net deferred taxes | $ | (145,299) |  |  | $ | (151,059) |
The net deferred taxes are primarily related to U.S. operations. The Company has no material state net operating losses (NOL) carryforwards and no federal or state tax credit carryforwards remaining as of December 31, 2024. We believe that the state NOL carryforward and other deferred tax assets are more likely than not to be realized and we have not recorded a valuation allowance against the deferred tax assets. The Company's accounting policy is to record the tax impacts of Global intangible low-taxed income as a period cost. As of December 31, 2024 and 2023, there were no material undistributed earnings of the Company's non-U.S. subsidiaries and, as such, we have not provided a deferred tax liability for undistributed earnings.

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