Annual report [Section 13 and 15(d), not S-K Item 405]

Income Taxes

v3.25.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

14. INCOME TAXES

Income before tax expense for 2024 was $20,272. Of this amount $21,288 is from domestic sources and ($1,016) is from foreign sources. Income before tax expense for 2023 was $19,493. Of this amount $19,921 is from domestic sources and ($428) is from foreign sources. Income before tax expense for 2022 was $38,399. Of this amount $38,789 is from domestic sources and ($390) is from foreign sources.

 

Year Ended December 31,

 

 

2024

 

 

2023

 

 

2022

 

Current Provision:

 

 

 

 

 

 

 

 

 

Federal

 

$

1,228

 

 

$

823

 

 

$

1,997

 

State and local

 

 

1,321

 

 

 

1,301

 

 

 

1,642

 

Foreign

 

 

—

 

 

 

—

 

 

 

—

 

Total Current Provision

 

 

2,549

 

 

 

2,124

 

 

 

3,639

 

Deferred Provision:

 

 

 

 

 

 

 

 

 

Federal

 

 

1,466

 

 

 

1,671

 

 

 

2,653

 

State and local

 

 

548

 

 

 

515

 

 

 

1,314

 

Foreign

 

 

—

 

 

 

—

 

 

 

—

 

Total Deferred Provision

 

 

2,014

 

 

 

2,186

 

 

 

3,967

 

Total Provision for Income Taxes

 

$

4,563

 

 

$

4,310

 

 

$

7,606

 

 

Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their bases for income tax purposes.

As of December 31, 2024 and 2023, the Company had a net deferred tax asset of $3,924 and $4,777, respectively.

A summary of deferred tax assets and liabilities as follows:

 

 

As of December 31,

 

 

2024

 

 

2023

 

Deferred tax assets

 

 

 

 

 

 

Intangible assets

 

$

9,821

 

 

$

9,944

 

Net operating losses, foreign subsidiary

 

$

308

 

 

$

141

 

Deferred leases

 

 

287

 

 

 

331

 

Other

 

 

63

 

 

 

176

 

Total deferred tax assets

 

$

10,479

 

 

$

10,592

 

Deferred tax liabilities

 

 

 

 

 

 

Intangible assets

 

$

4,797

 

 

$

4,204

 

Fixed assets

 

$

1,190

 

 

$

1,170

 

Right of use assets

 

 

206

 

 

 

247

 

Other

 

 

54

 

 

 

53

 

Total deferred tax liabilities

 

 

6,247

 

 

 

5,674

 

Net deferred tax assets (liabilities)

 

 

4,232

 

 

 

4,918

 

Less: Valuation allowance

 

 

(308

)

 

 

(141

)

Net deferred tax assets (liabilities)

 

$

3,924

 

 

$

4,777

 

 

The following table reconciles the provision for income taxes to the U.S. Federal statutory tax rate:

 

 

Year Ended December 31,

 

 

2024

 

 

2023

 

 

2022

 

Statutory U.S. federal income tax rate

 

 

21.00

%

 

 

21.00

%

 

 

21.00

%

Income attributable to non-controlling interests

 

 

(6.88

)%

 

 

(7.07

)%

 

 

(6.84

)%

State and local income taxes

 

 

7.58

%

 

 

7.74

%

 

 

6.30

%

Permanent items

 

 

0.09

%

 

 

0.21

%

 

 

(0.77

)%

Foreign rate differential

 

 

0.20

%

 

 

0.09

%

 

 

(0.18

)%

Other

 

 

(0.34

)%

 

 

(0.22

)%

 

 

0.12

%

Change in valuation allowance

 

 

0.85

%

 

 

0.37

%

 

 

0.18

%

Effective income tax rate

 

 

22.50

%

 

 

22.12

%

 

 

19.81

%

During 2024, 2023 and 2022, the Company recorded a deferred tax asset associated with net operating losses of its foreign subsidiary. Realization of the deferred tax asset is contingent on the foreign subsidiary generating future taxable income. Given the foreign subsidiary has recently initiated operations and does not yet have a history of sales, the Company has concluded that the deferred tax asset does not currently meet the more-likely-than-not threshold for realizability. Accordingly, a full valuation allowance has been recorded with respect to the net operating losses of the Company’s foreign subsidiary in the amount of $308, $141 and $68 at December 31, 2024, 2023 and 2022, respectively.

In the normal course of business, the Company is subject to examination by federal, state, and local tax regulators. As of December 31, 2024, the Company’s U.S. federal income tax returns for the years 2021 through 2024 are open under the normal three-year statute of limitations and therefore subject to examination.

The guidance for accounting for uncertainty in income taxes prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company does not believe that it has any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months. Furthermore, the Company does not have any material uncertain tax positions at December 31, 2024 and 2023.