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INCOME TAXES
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Income tax expense for the years ended December 31, 2023, 2022 and 2021 consisted of the following (in thousands):
202320222021
Current
Federal$25,170 $35,857 $49,433 
State3,001 5,558 6,380 
Total current28,171 41,415 55,813 
Deferred
Federal1,523 (738)(3,424)
State(312)(186)(291)
Foreign— — — 
Total deferred1,211 (924)(3,715)
Provision for income taxes$29,382 $40,491 $52,098 
The total provision for income taxes for the years ended December 31, 2023, 2022 and 2021 was $29.5 million, $40.5 million and $52.2 million, respectively. Those amounts have been allocated to the following financial statement items:
202320222021
Income before provision for income taxes$29,382 $40,491 $52,098 
Stockholders' equity, unrealized (losses) gains on investment securities & foreign currency112 (27)66 
Total provision for income taxes$29,494 $40,464 $52,164 
The reconciliation of the United States federal statutory tax provision to the Company’s provision for income taxes for the years ended December 31, 2023, 2022 and 2021 (in thousands, except percentages):
202320222021
Statutory federal tax$27,048 21.0 %$38,621 21.0 %$45,405 21.0 %
State income taxes, net of federal benefit2,124 1.7 %4,635 2.5 %4,980 2.3 %
Foreign taxes
Hong Kong63 0.0 %75 0.0 %91 0.0 %
Singapore(199)(0.2)%28 0.0 %32 0.0 %
Share-based compensation
143 0.1 %(26)0.0 %(1,835)(0.8)%
Research and development and jobs credits(1,258)(1.0)%(819)(0.4)%(503)(0.2)%
Executive compensation1,895 1.5 %1,470 0.8 %2,652 1.2 %
Charitable donations(1,094)(0.8)%(4,316)(2.3)%— 0.0 %
Valuation allowance(613)(0.5)%396 0.2 %468 0.2 %
Intercompany loan restructuring1,167 0.9 %— — %— — %
Other permanent differences106 0.1 %427 0.2 %808 0.4 %
Provision for income taxes$29,382 22.8 %$40,491 22.0 %$52,098 24.1 %
Significant components of the Company’s deferred tax assets (liabilities) consisted of the following (in thousands):
December 31, 2023December 31, 2022
Reserves on inventory and sales$721 $1,069 
Credit and loss carryforwards2,881 3,713 
Stock compensation1,784 2,374 
Accrued expenses and deferred costs2,986 5,153 
Inventory capitalization587 1,781 
Lease obligations5,542 5,773 
Capitalized research costs5,841 2,502 
Charitable donations114 1,862 
State taxes1,520 — 
Other164 190 
Valuation allowance(1,680)(2,523)
Total deferred tax assets20,460 21,894 
Right-of-use assets(3,938)(4,089)
Prepaid expenses(2,084)(1,289)
Depreciation(10,321)(11,165)
Other— (23)
Total deferred tax liabilities(16,343)(16,566)
Net deferred tax assets$4,117 $5,328 

On August 12, 2022, the President of the United States signed into law the Inflation Reduction Act. The two primary tax implications for corporations are a 15% alternative minimum tax (“AMT”) that applies to corporations with at least one billion of pretax income and a one percent surtax on share buybacks. The AMT will not apply to the Company in 2023 since the Company’s 2023 pretax income does not exceed the threshold. The share buyback surtax will not apply to the Company as its share issuances exceed its share buybacks in 2023. The Inflation Reduction Act did not have a material impact on the Company’s tax provision for the years ended December 31, 2023 and 2022.
We file income tax returns in the United States and various states and foreign jurisdictions. The Company has separate state and foreign net operating loss carry forwards totaling $28.7 million that start expiring in 2029. The Company has recorded a valuation allowance for the portion of the net operating loss carry forwards which are not expected to be realized.
As of December 31, 2023, the Company had $7.5 million of gross unrecognized tax benefits, which would have a net $6.2 million impact on the effective tax rate, if recognized. As of December 31, 2022, the Company had $6.0 million of gross unrecognized tax benefits, which would have a net $4.8 million impact on the effective tax rate, if recognized. The change for both 2023 and 2022 primarily relates to additional gross unrecognized benefits for current and prior year tax positions. The amounts of unrecognized tax benefits were as follows:

December 31, 2023December 31, 2022
Unrecognized tax benefit at the beginning of the period
$6,011 $2,714 
Increase for current year tax positions
1,744 860 
Increase for prior period tax positions38 2,487 
Reduction due to lapse in statute of limitations(291)(50)
Unrecognized tax benefit at the end of the period
$7,502 $6,011 

The Company recognizes interest and penalty expenses related to unrecognized tax positions as a component of the income tax provision. As of December 31, 2023, and 2022, interest and penalties accrued were $1.3 million and $0.9 million, respectively. For 2023 and 2022, the Company recorded expenses (benefits) related to interest and penalties of $0.3 million and $0.2 million, respectively. As of December 31, 2023, the current year reduction primarily relates to the expiration of federal, state, and foreign statutes of limitation. The Company cannot reasonably project the change in its uncertain tax positions over the next twelve months. Our tax returns are subject to examination by various federal, state, and local tax authorities. The Company believes that it has adequately provided for all tax positions; however, amounts asserted by taxing authorities could be greater than our accrued position. Pending the resolution of one examination, and specific to jurisdictions where the Company has filed tax returns and examination of such returns is constrained by a statute of limitations, we are no longer subject to United States federal, state, and local income tax examinations by tax authorities for years prior to 2020.