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Note I - Income Taxes
 9 Months Ended
Sep. 30, 2025
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

NOTE I: INCOME TAXES

The Company and its subsidiaries are subject to U.S. and Canadian federal income tax laws as well as the income tax laws of multiple state jurisdictions. The major tax jurisdictions in which the Company operates generally provide for a deficiency assessment statute of limitations period of three years, and as a result, the Company’s tax years 2021 and forward remain open to examination in those jurisdictions.

 

In determining whether a tax asset valuation allowance is necessary, management, in accordance with the provisions of ASC 740-10-30, Accounting for Income Taxes, weighs all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance is necessary. If negative conditions exist which indicate a valuation allowance might be necessary, consideration is then given to what effect the future reversals of existing taxable temporary differences and the availability of tax strategies might have on future taxable income to determine the amount, if any, of the required valuation allowance. As of September 30, 2025, management determined that the future reversals of existing taxable temporary differences and available tax strategies would generate sufficient future taxable income to realize its tax assets and therefore a valuation allowance was not necessary.

 

The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the position will be sustained on examination by taxing authorities, based on the technical merits of the position. As of September 30, 2025, an adjustment to the Company’s condensed consolidated financial statements for uncertain tax positions has not been required as management believes that the Company’s tax positions taken in income tax returns filed or to be filed are supported by clear and unambiguous income tax laws. The Company recognizes interest and penalties related to uncertain income tax positions, if any, in income tax expense. During the nine months ended September 30, 2025 and 2024, the Company has not recognized or accrued any interest or penalties related to uncertain income tax positions.

 

The Company’s effective income tax rates were 25.3% and 23.8% for the nine months ended September 30, 2025 and 2024, respectively. Our effective tax rate for the nine months ended September 30, 2025 differs from amounts computed by applying the United States federal statutory rates to pre-tax income primarily due to state income taxes.

 

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted into law. Among other provisions, the legislation reinstated 100% bonus depreciation for qualifying property acquired and placed in service after January 19, 2025, and modified the limitation on business interest expense under Internal Revenue Code Section 163(j) to be based on 30% of adjusted taxable income determined using an EBITDA measure, rather than EBIT. These provisions are effective for tax years beginning after December 31, 2024, and therefore apply to the Company’s 2025 tax year.

 

As a result of these provisions, the Company recorded accelerated depreciation deductions and recognized previously disallowed interest expense, which collectively increased current-year deductible expenses and are expected to result in a projected federal net operating loss position for the year ending December 31, 2025. The enactment of the OBBBA resulted in a material impact  to the Company’s current and deferred income tax balances reflected on the condensed consolidated balance sheet and income statement for the quarter ended September 30, 2025. The net operating loss partially offset previously recorded deferred tax balances, resulting in a net decrease of $8.5 million in deferred tax liabilities as of September 30, 2025 compared to December 31, 2024.

 

The effects of the OBBBA have been reflected in the Company’s current and deferred tax calculations as of September 30, 2025, in accordance with ASC 740-10-45-15, which requires the Company to recognize the impact of enacted changes in tax laws on both current tax expense and deferred tax assets and liabilities in the period of enactment, and to provide sufficient disclosure so that users of the financial statements understand the effect of such changes on the Company’s financial position and results of operations.