v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of income tax (benefit) expense were as follows (in thousands):

Year Ended December 31,
 202320242025
 
Current income tax expense:   
Federal$2,384 $3,141 $1,575 
State2,430 2,688 2,432 
4,814 5,829 4,007 
Deferred income tax (benefit) expense:   
Federal(12,713)3,722 7,575 
State(2,816)868 566 
 (15,529)4,590 8,141 
 Income tax (benefit) expense$(10,715)$10,419 $12,148 
    
The tax effects of principal temporary differences are as follows (in thousands):

As of December 31,
 20242025
Deferred tax assets  
Goodwill and intangibles$41,872 $36,521 
Operating lease liability26,638 17,132 
Allowance for doubtful accounts3,737 4,487 
Restricted stock1,801 2,013 
Accrued vacation and severance475 768 
Investments4,098 4,171 
Stock compensation expense38 — 
Other comprehensive income - unrealized loss on interest rate cap— 6 
Other909 688 
Total gross deferred tax assets79,568 65,786 
Valuation allowance(4,409)(4,596)
Total net deferred tax assets75,159 61,190 
Deferred tax liabilities
Income tax deductible capitalized software development costs(534)(3,298)
Operating lease asset(23,668)(14,552)
Property and equipment(3,597)(2,837)
Prepaid expenses(49)(1,032)
Stock compensation expense— (295)
Total deferred tax liabilities(27,848)(22,014)
Deferred tax assets, net$47,311 $39,176 

At December 31, 2024 and 2025, the Company had apportioned state net operating loss carryforwards of $6.4 million and $9.3 million, respectively, and federal capital loss carryforwards of $12.8 million in both years, which are available to offset future taxable income. The federal capital loss carryforwards will begin to expire in 2026 while the state net operating loss carryforwards will begin to expire in various years from 2036 through 2045. The amount of state net operating losses that can be carried forward indefinitely is $6.7 million. The Company’s utilization of net operating loss carryforwards may be subject to annual limitations due to ownership change provisions of Section 382 of Internal Revenue Code of 1986, as amended.
Income tax (benefit) expense differs from the amount of tax determined by applying the U.S. federal income tax rates to pretax loss and income due to the application of state apportionment laws, permanent tax differences, and other temporary differences (in thousands):

Year Ended December 31,
 202320242025
 Amount%Amount%Amount%
    
U.S. federal Statutory tax rate$(12,180)21.00 %$5,572 21.00 %$9,178 21.00 %
State and local income taxes, net of federal income tax effect (1)(2)(3)
(897)1.55 %2,991 11.27 %2,571 5.88 %
Changes in Valuation allowance1,265 (2.18)%1,838 6.93 %— — %
Nontaxable or nondeductible items
Loss on equity investment— — %(812)(3.06)%— — %
Equity-based compensation benefits837 (1.44)%194 0.73 %(1,083)(2.47)%
Executive compensation172 (0.31)%395 1.49 %1,315 3.01 %
Other permanent differences98 (0.17)%97 0.37 %127 0.29 %
Other adjustments(10)0.02 %144 0.54 %40 0.09 %
Effective tax rate$(10,715)18.47 %$10,419 39.27 %$12,148 27.80 %
(1) In 2023, state taxes in Minnesota, Florida, Illinois, Georgia, California, and Virginia made up the majority (greater than 50%) of the tax effect in this category.

(2) In 2024, state taxes in Georgia, Florida, Minnesota, Illinois, Maryland, North Carolina, and Texas made up the majority (greater than 50%) of the tax effect in this category.

(3) In 2025, state taxes in Florida, Minnesota, Illinois, Georgia, Mississippi, Maryland, and Texas made up the majority (greater than 50%) of the tax effect in this category.

The Company paid cash taxes for the years ended December 31, 2023, 2024, or 2025 as follows (in thousands):

Year Ended December 31,
202320242025
Cash paid for U.S. federal income taxes, net$— $2,700 $4,000 
Cash paid for state and local income taxes, net2,417 3,604 2,516 
$2,417 $6,304 $6,516 
Income taxes paid (net of refunds) exceeded 5 percent of total income taxes paid (net of refunds) in the following jurisdictions (in thousands):

Year Ended December 31,
202320242025
State
Georgia$267 $427 *
Minnesota233 **
Maryland210 **
Florida207 **
North Carolina148 **
Texas142 **
Pennsylvania129 **
* Jurisdiction below the threshold for the period presented

There were no material uncertain tax positions as of December 31, 2023, 2024, or 2025. Interest and penalties associated with uncertain income tax positions would be classified as income tax expense. The Company has not recorded any material interest or penalties during any of the years presented.
The Company is subject to U.S. federal income taxes as well as income tax of multiple state jurisdictions. For U.S. federal and state tax purposes, tax years 2022-2024 remain open to examination.