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Income Taxes
 3 Months Ended
Mar. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes

11. Income taxes

 

In accordance with applicable accounting guidance, the income tax expense for the three months ended March 31, 2023 is based on the estimated annual effective tax rate for calendar year 2023. Our provision for income taxes is based on estimated effective tax rates derived from an estimate of annual consolidated earnings before taxes, adjusted for nondeductible expenses, other permanent items, valuation allowances, and any applicable income tax credits.

 

Our provision for income taxes reflected an effective tax rate of approximately (0.90)% and (0.31%) for the three months ended March 31, 2023 and 2022, respectively. For the three months ended March 31, 2023 and 2022, our effective tax rate was lower than the U.S. federal statutory rate of 21% primarily due to our valuation allowance offsetting the benefits of losses. Current income tax expenses and benefits consist primarily of state income tax expense, deferred income tax expense relating to the tax amortization of acquired goodwill and income tax expense from foreign operations.

 

To date, we have provided a valuation allowance against most of our deferred tax assets as we believe the objective and verifiable evidence of our historical pretax net losses outweighs any positive evidence of our forecasted future results. We will continue to monitor the positive and negative evidence, and will adjust the valuation allowance as sufficient objective positive evidence becomes available.

 

As of March 31, 2023, we had $396 thousand in uncertain tax positions representing no increase from the balance on December 31, 2022. Operating losses generated in years prior to 2017 remain open to adjustment until the statute of limitations closes for the tax year in which the net operating losses are utilized. Our tax years 2018 through 2022 generally remain open to examination by the major taxing jurisdictions to which we are subject. We are currently not under audit by any taxing jurisdiction.