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Note 12 - Income Tax
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

Note 12 - Income Tax

 

Income tax expense during interim periods is based on applying an estimated annual effective income tax rate to year-to-date income, plus any significant unusual or infrequently occurring items which are recorded in the interim period. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating income for the year and changes in tax law and tax rates. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is obtained, additional information becomes known, or the tax environment changes.

 

Our effective tax rate for continuing operations during the three months ended  September 30, 2024 and  September 30, 2023 was 25.1% and 24.5%, respectively. Our effective tax rate for continuing operations during the nine months ended  September 30, 2024 and  September 30, 2023 was 9.7% and 20.4%, respectively. The primary reason for the difference between the statutory federal income tax rate of 21.0% and our effective income tax rate results from the federal Work Opportunity Tax Credit, which is designed to encourage employers to hire workers from certain targeted groups with higher-than-average unemployment rates. Other differences result from state income taxes, certain non-deductible expenses, and tax effects of stock-based compensation.
 
We use an intra-period tax allocation to allocate total income tax expense or benefit to the different components of continuing operations and discontinued operations. This allocation uses a with and without methodology to determine income tax expense for discontinued operations. Tax benefit (expense) allocated to discontinued operations was $14 thousand and $37 thousand for the three months ended  September 30, 2024 and  September 30, 2023, respectively, and  $49 thousand and $( 48) thousand for the nine months ended  September 30, 2024 and  September 30, 2023.