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INCOME TAXES
 6 Months Ended
Jun. 30, 2023
INCOME TAXES  
INCOME TAXES

(12)   INCOME TAXES

The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, primarily related to excess tax benefits from stock option exercises and the tax impact of the change in fair value of contingent consideration. For the three months ended June 30, 2023 and 2022 discrete items adjusted were ($1.6) million and ($0.9) million, respectively. For the six months ended June 30, 2023 and 2022 discrete items adjusted were ($3.1) million and ($0.4) million, respectively. At June 30, 2023 and 2022, the Company is estimating an annual effective tax rate of approximately 27% and 25%, respectively. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. There is a potential for volatility of the effective tax rate due to various factors.

The provision for income taxes is recorded at the end of each interim period based on the Company’s best estimate of its effective income tax rate expected to be applicable for the full fiscal year. The Company’s effective income tax rate was 14% and 23% for the six months ended June 30, 2023 and 2022, respectively. The decrease in the Company’s effective income tax rate for the six months ended June 30, 2023 compared to the same period in 2022, primarily relate to the tax impact of discrete items, in particular the change in fair value of contingent consideration recorded during the current quarter which is not expected to be taxable. The Company recorded income tax expense of $0.7 million and $0.8 million for the three and six months ended June 30, 2023, respectively, and income tax expense of $0.8 million and $1.4 million for the three and six months ended June 30, 2022, respectively.

Taxes of $3.0 million and $3.9 million were paid during the six months ended June 30, 2023 and 2022, respectively.