Income Taxes |
3 Months Ended |
|---|---|
Mar. 31, 2022 | |
| Income Taxes | |
| Income Taxes |
Note 16. Income Taxes As of December 31, 2021, the Company had federal net operating loss carryforwards of approximately $24.3 million and state net operating loss carryforwards of approximately $12.8 million, respectively. Losses will begin to expire, if not utilized, in 2032. Utilization of the net operating loss carryforwards may be subject to an annual limitation according to Section 382 of the Internal Revenue Code of 1986 as amended, and similar provisions. The Company applies the standards on uncertainty in income taxes contained in ASC Topic 740, Accounting for Income Taxes. The adoption of this interpretation did not have any impact on the Company’s consolidated financial statements, as the Company did not have any significant unrecognized tax benefits during the three months ended March 31, 2022 or the year ended December 31, 2021. In general the statute of limitations remains open subsequent to and including the year ended December 31, 2019 however, due to (and to the extent of) certain acquired losses the statute of limitations remains open for periods subsequent to and including the year ended December 31, 2015. In determining the quarterly provision for income taxes, the Company used the annual effective tax rate applied to year-to-date income. The Company’s annual estimated effective tax rate differs from the statutory rate primarily as a result of state taxes, permanent differences, and changes in the Company’s valuation allowance. The income tax effects of unusual or infrequent items, including a change in the valuation allowance as a result of a change in judgment regarding the realizability of deferred tax assets are excluded from the estimated annual effective tax rate and are required to be discretely recognized in the interim period in which they occur. The Company has historically maintained a valuation allowance against deferred tax assets and reported only minimal current state tax expense. The Company recorded an income tax expense of approximately $25,000 and income tax expense of $5,000 for the three months ended March 31, 2022 and 2021 respectively. The Company expects to maintain a valuation allowance on current year remaining net deferred tax assets by year-end due to historical operating losses. |