INCOME TAXES |
6 Months Ended |
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Jun. 30, 2025 | |
| INCOME TAXES | |
| INCOME TAXES | NOTE D – INCOME TAXES On July 4, 2025, the United States Congress passed budget reconciliation bill H.R. 1 referred to as the One Big Beautiful Bill Act (“OBBB”). The OBBB contains several changes to corporate taxation, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017, including 100% expensing of qualified depreciable assets and modifications to capitalization of research and development expenses. The OBBB has multiple effective dates with certain provisions effective in 2025 and others implemented through 2027. The Company is continuing to evaluate the overall impact of the OBBB. At this time, however, the Company does not anticipate a material impact on its effective tax rate for 2025. The Company’s total effective tax rate was 28.2% and 27.9% for the three and six months ended June 30, 2025, respectively, compared to 4.7% and 1.6% for the same respective prior year periods, including discontinued operations. 2024 tax rates were lower primarily due to the pre-tax loss from the noncash impairment charge to write off the equity investment in Phantom Auto included in the loss from continuing operations during the first quarter of 2024 and the tax benefit from the vesting of restricted stock units (“RSUs”) granted in 2020 and 2021. State tax rates vary among states and average approximately 6.0%, although some state rates are higher, and a small number of states do not impose an income tax. For the three and six months ended June 30, 2025 and 2024, the difference between the Company’s effective tax rate from continuing operations and the federal statutory rate resulted from various factors, including state income taxes; the tax expense (benefit) from the vesting of RSUs; changes in the cash surrender value of life insurance; and various nondeductible expenses, including compensation under IRC Section 162(m). The difference between the effective tax rate and the federal statutory rate for the six months ended June 30, 2024 also included the federal alternative fuel tax credit that expired on December 31, 2024. As of June 30, 2025, the Company’s deferred tax liabilities, which will reverse in future years, exceeded the deferred tax assets. The Company evaluated the total deferred tax assets at June 30, 2025, and concluded that, other than for certain deferred tax assets related to foreign and state tax credit carryforwards and federal and state net operating losses, the assets did not exceed the amount for which realization is more likely than not. In making this determination, the Company considered the future reversal of existing taxable temporary differences, future taxable income, and tax planning strategies. The Company paid federal, state, and foreign income taxes, net of refunds of $2.4 million and $20.7 million for the six months ended June 30, 2025 and 2024, respectively. Income tax expense reflected in discontinued operations, which primarily consisted of federal and state income taxes on the gain adjustment from sale of FleetNet, was $0.2 million for the six months ended June 30, 2024, or an effective tax rate of 25.5%.
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