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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes During the years ended December 31, 2023, 2022 and 2021, the Company recognized income tax expense of $6.8 million, $26.9 million and $45.1 million, respectively, resulting in effective tax rates of 23.5%, 28.8% and 23.6%, respectively. The Company’s income tax expense for the year ended December 31, 2023 differs from amounts computed by applying the U.S. federal statutory tax rate of 21% are primarily the result of permanent book/tax differences related to non-deductible compensation under Section 162(m). The Company’s income tax expense for the year ended December 31, 2022 differs from amounts computed by applying the U.S. federal statutory tax rate of 21% primarily due to the impact of state income taxes. The Company’s income tax expense for the year ended December 31, 2021 differs from amounts computed by applying the U.S. federal statutory tax rate of 21% primarily due to the impact of state income taxes and the gain associated with the extinguishment of the liability associated with the tax receivable agreement. The components of the Company’s income tax expense attributable to operations are as follows:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
| (in thousands)
Current tax expense |  |  |  |  |
Federal | $ | 10,091 |  |  | $ | 22,029 |  |  | $ | 19,537 |
State | 1,682 |  |  | 4,516 |  |  | 5,494 |
Deferred tax expense (benefit) |  |  |  |  |
Federal | (2,821) |  |  | (4,165) |  |  | 16,098 |
State | (2,164) |  |  | 4,540 |  |  | 3,957 |
Income tax expense | $ | 6,788 |  |  | $ | 26,920 |  |  | $ | 45,086 |
The Company’s income tax expense attributable to operations differs from the expected tax benefit amount computed by applying the statutory federal income tax rate to income before taxes is as follows:
|  | Year Ended December 31,
|  | 2023 |  | 2022 |  | 2021
Income tax expense (benefit) computed at the statutory rate |  | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes |  | — | % |  | 7.7 | % |  | 3.7 | %
Officer's compensation limitation under 162(m) (1) |  | 2.5 | % |  | 0.7 | % |  | 0.3 | %
Stock-based compensation (1) |  | 1.1 | % |  | 0.5 | % |  | 0.1 | %
Gain on extinguishment of tax receivable agreement |  | — | % |  | — | % |  | (1.0) | %
Other, net (1) |  | (1.1) | % |  | (1.1) | % |  | (0.5) | %
Income tax expense (benefit) effective tax rate |  | 23.5 | % |  | 28.8 | % |  | 23.6 | %
(1) Certain prior year tax component amounts have been reclassified to conform to the current year presentation.
The Company’s state income taxes include a decrease in expense associated with the remeasurement of the Company’s deferred tax assets for increases to estimated tax rates expected to be applied in future years. The components of the Company’s deferred tax assets and liabilities are as follows:
|  | Year Ended December 31,
|  | 2023 |  | 2022
|  | (in thousands)
| Deferred tax assets |  |  |
| Amortizable intangible assets | $ | 73,650 |  |  | $ | 78,296 |
| Operating lease liability | 995 |  |  | 1,113 |
| Accrued expenses | 1,418 |  |  | 563 |
| Total deferred tax assets (1) | $ | 76,063 |  |  | $ | 79,972 |
| Deferred tax liabilities |  |  |
| Contract assets | (4,056) |  |  | (12,863) |
| Operating lease right-of-use asset | (972) |  |  | (1,105) |
| Fixed assets | (463) |  |  | (608) |
| Other | (459) |  |  | (268) |
| Total deferred tax liabilities | $ | (5,950) |  |  | $ | (14,844) |
| Deferred tax asset, net | $ | 70,113 |  |  | $ | 65,128 |
(1) Certain prior year deferred tax component amounts have been reclassified to conform to the current year presentation. As of December 31, 2023, the Company has assessed whether it is more likely than not that the Company’s deferred tax assets will be realized. In making this determination, the Company considers all available positive and negative evidence and makes certain assumptions. The Company considers, among other things, the reversal of its deferred tax liabilities, the overall business environment, its historical earnings and losses, current industry trends and its outlook for future years. The Company believes it is more-likely-than-not all deferred tax assets will be realized and has not recorded any valuation allowance as of December 31, 2023. The total amount of unrecognized tax benefits as of December 31, 2023 that, if recognized, would impact the effective income tax rate was $4.0 million. The total amount of unrecognized tax benefits as of December 31, 2022 that, if recognized, would impact the effective income tax rate was $3.9 million. As of December 31, 2023, the Company has a receivable of $5.1 million related to state income tax refund claims filed for prior tax years. The liability for unrecognized tax benefits includes $3.8 million of tax expense associated with these refund claims and tax uncertainties in various state jurisdictions due to the complexity of applying evolving state tax laws and uncertainties with respect to sustaining the Company’s refunds claims. The Company believes it is not reasonably possible that the unrecognized tax benefits will significantly change during the next twelve months. In 2023, the Company changed its policy to recognize interest and penalties related to income taxes as a component of income tax expense to better align the classification with the substance of the associated transactions. This accounting policy change had no impact to net income or basic and diluted earnings per share, or to the Consolidated Statements of Operations, for any previous period. The Company files its federal and state income tax returns and some of these returns remain open for examination, with the earliest open years in its key jurisdictions as follows:
U.S. Federal | 2016
State of Texas | 2016
State of New York | 2017
State of Illinois | 2020

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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 -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
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