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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Before Income Taxes

Income before income taxes consists of the following (in thousands):

		Years Ended December 31,
		2022				2021				2020
Domestic		$	16,552			$	22,424			$	7,237
Foreign			14,172				10,767				5,696
Total		$	30,724			$	33,191			$	12,933

Components of Income Tax Expense

The components of the income tax expense are as follows (in thousands):

		Years Ended December 31,
		2022				2021				2020
Current:
Federal		$	9,349			$	4,203			$	603
State			3,819				2,272				2,054
Foreign			2,402				2,147				1,963
Total current			15,570				8,622				4,620
Deferred:
Federal			(5,513	)			334				490
State			(1,788	)			(663	)			(1,641	)
Foreign			649				54				(526	)
Total deferred			(6,652	)			(275	)			(1,677	)
Income tax expense		$	8,918			$	8,347			$	2,943

Reconciliation of Federal Statutory Rate

A reconciliation of the federal statutory rate to Forrester’s effective tax rate is as follows:

		Years Ended December 31,
		2022				2021				2020
Income tax provision at federal statutory rate			21.0	%			21.0	%			21.0	%
Increase (decrease) in tax resulting from:
State tax provision, net of federal benefit			5.2				3.8				2.6
Foreign tax rate differential			(0.5	)			(0.4	)			(0.2	)
Stock compensation			0.9				(0.4	)			5.7
Withholding taxes			1.7				1.3				3.3
Non-deductible expenses			1.5				—				2.2
Change in valuation allowance			1.0				—				(5.8	)
Foreign subsidiary income subject to U.S. tax			0.6				(0.5	)			(4.3	)
Change in tax legislation			(1.6	)			(0.3	)			(1.9	)
Other, net			(0.8	)			0.6				0.2
Effective tax rate			29.0	%			25.1	%			22.8	%

Components of Deferred Income Taxes

The components of deferred income taxes are as follows (in thousands):

		As of December 31,
		2022				2021
Non-deductible reserves and accruals		$	2,736			$	1,567
Net operating loss and other carryforwards			6,215				8,343
Stock compensation			2,051				1,256
Lease liability			17,715				20,870
Gross deferred tax asset			28,717				32,036
Less - valuation allowance			(989	)			(1,114	)
Sub-total			27,728				30,922
Other liabilities			(807	)			(741	)
Depreciation and amortization			(1,023	)			(1,962	)
Goodwill and intangible assets			(18,648	)			(22,488	)
Operating lease right-of-use assets			(13,705	)			(17,340	)
Deferred commissions			(6,913	)			(8,268	)
Net deferred tax liability		$	(13,368	)		$	(19,877	)

Summary of Changes in Deferred Tax Valuation Allowance

The following table provides a summary of the changes in the deferred tax valuation allowance for the years ended December 31, 2022, 2021, and 2020 (in thousands):

		2022				2021				2020
Deferred tax valuation allowance at January 1		$	1,114			$	1,237			$	2,274
Additions			106				—				52
Deductions			(336	)			(108	)			(1,134	)
Change in tax legislation			186				—				2
Translation adjustments			(81	)			(15	)			43
Deferred tax valuation allowance at December 31		$	989			$	1,114			$	1,237

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is summarized as follows for the years ended December 31, 2022, 2021, and 2020 (in thousands):

		2022				2021				2020
Unrecognized tax benefits at January 1		$	5			$	28			$	345
Reductions for tax positions of prior years			(4	)			(24	)			(344	)
Translation adjustments			(1	)			1				27
Unrecognized tax benefits at December 31		$	—			$	5			$	28

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