INCOME TAXES |
6 Months Ended |
|---|---|
Jun. 30, 2023 | |
| Income Tax Disclosure [Abstract] | |
| INCOME TAXES |
NOTE 9: INCOME TAXES
The Company’s provision for income taxes consists of U.S., state and local, and foreign taxes. The Company has significant operations in various locations outside the U.S. The annual effective tax rate is a composite rate reflecting the earnings in the various locations at their applicable statutory tax rates.
The Company’s income tax benefit was $2.8 million for the three months ended June 30, 2023, which includes a discrete tax provision of $0.3 million related primarily to tax expense for a shortfall of the tax benefits on stock-based awards that have vested and the remeasurement of state deferred taxes as a result of state law changes enacted during the quarter. The effective tax rate for the three months ended June 30, 2023 was 33.3% on a pre-tax loss of $8.3 million. The effective tax rate differs from the statutory federal rate of 21% primarily due to foreign income at different rates, permanent differences, and the discrete tax provision described above.
The Company’s income tax provision was $8.7 million for the six months ended June 30, 2023, which includes a discrete tax provision of $1.3 million related primarily to tax expense for a shortfall of the tax benefits on stock-based awards that have vested and the remeasurement of state deferred taxes as a result of state law changes enacted during the first half of 2023. The effective tax rate for the six months ended June 30, 2023 was (52.5%) on a pre-tax loss of $16.6 million which differs from the statutory federal rate of 21% primarily due to an increase in the valuation allowance related to interest expense for which deductibility is limited under IRC §163(j), foreign income at different rates, non-deductible permanent differences, state and local taxes, and the U.S. tax effect of international operations including Global Intangible Low-Taxed Income (“GILTI”) recorded during the period, and the discrete tax provision described above.
The Company’s income tax provision was $0.8 million for the three months ended June 30, 2022. The effective tax rate for the three months ended June 30, 2022 was 38.4% on pre-tax income of $2.2 million. The effective tax rate differs from the statutory federal rate of 21% primarily due to state and local taxes, non-deductible permanent differences, limited benefit on current year interest deductions and losses in certain jurisdictions, the change in the fair value of warrant liabilities, foreign income at different rates and the U.S. tax effect of international operations including GILTI recorded during the period.
The Company’s income tax provision was $2.0 million for the six months ended June 30, 2022. The effective tax rate for the six months ended June 30, 2022 was 32.5% on pre-tax income of $6.0 million which differs from the statutory federal rate of 21% primarily due to state and local taxes, non-deductible permanent differences, limited benefit on current year interest deductions and losses in certain jurisdictions, the change in the fair value of warrant liabilities, foreign income at different rates and the U.S. tax effect of international operations including GILTI recorded during the period.
At both June 30, 2023 and December 31, 2022, the Company had an uncertain tax position liability of $0.2 million, including interest and penalties. The unrecognized tax benefits include amounts related primarily to various state tax issues.
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