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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes |
16. | INCOME TAXES
Income (loss) before provision for income taxes consisted of the following (in thousands):
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |
Domestic |  | $ | 2,221 |  |  | $ | 33,191 |
Foreign |  |  | (509 | ) |  |  | (286 | )
Income before provision for income taxes |  | $ | 1,712 |  |  | $ | 32,905 |
The income tax provision for the year ended December 31, 2022 and 2021 consists of the following:
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |
Current income tax provision (benefit): |  |  |  |  |  |  |  |
Federal |  | $ | 749 |  |  | $ | — |
State and Local |  |  | 377 |  |  |  | 286 |
Foreign |  |  | 5 |  |  |  | — |
Total current expense (benefit): |  |  | 1,131 |  |  |  | 286 |
Deferred income tax provision (benefit): |  |  |  |  |  |  |  |
Federal |  |  | (714 | ) |  |  | — |
State and Local |  |  | (29 | ) |  |  | — |
Foreign |  |  | — |  |  |  | — |
Total deferred expense (benefit): |  |  | (743 | ) |  |  | — |
Total income tax provision (benefit) |  | $ | 388 |  |  | $ | 286 |
A reconciliation of the federal income tax rate to the Company’s effective tax rate for the year ended December 31, 2022 and 2021 is as follows:
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |
Statutory federal income tax rate |  |  | 21.00 | % |  |  | 21.00 | %
State taxes, net of federal benefit |  |  | 18.20 | % |  |  | 0.87 | %
Nontaxable partnership income |  |  | -41.39 | % |  |  | -21.00 | %
Foreign rate differential |  |  | -2.71 | % |  |  | 0.00 | %
Change in valuation allowance |  |  | 27.55 | % |  |  | 0.00 | %
|  |  | 22.65 | % |  |  | 0.87 | %
The Company’s significant rate reconciliation items are driven primarily by state taxes, permanent differences associated with Holdings’ flowthrough income and the recognition of a valuation allowance. The Company’s net deferred tax assets (liabilities) as of December 31, 2022 and 2021 is as follows:
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |
Deferred tax assets: |  |  |  |  |  |  |  |
Outside basis difference in partnership |  | $ | 1,173 |  |  | $ | — |
Net operating loss carryforwards |  |  | 164 |  |  |  | — |
Intangibles |  |  | 978 |  |  |  | — |
Total deferred tax assets |  | $ | 2,315 |  |  | $ | — |
Valuation allowance |  |  | (477 | ) |  |  | — |
Deferred tax assets, net of allowance |  | $ | 1,838 |  |  | $ | — |
As of December 31, 2022, the Company had a foreign net operating losses of $0.5 million, which begin to expire in 2032. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax assets, projected future taxable income and tax planning strategies in making this assessment. After consideration of all the information available, management has recorded a valuation allowance against the foreign net operating losses and the portion of outside basis difference related to Holdings’ permanent book/tax differences. The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations for both federal taxes and the many states in which we operate or do business in. ASC 740 states that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits. We record uncertain tax positions as liabilities in accordance with ASC 740 and adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available. As of December 31, 2022 and 2021 we have not recorded any uncertain tax positions in our financial statements. The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable. There are currently no pending tax examinations. The Company’s tax years are still open under statute from December 31, 2019, to the present. The resolution of tax matters is not expected to have a material effect on the Company’s consolidated financial statements.

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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 -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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