Income Taxes |
3 Months Ended |
|---|---|
Mar. 31, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Note 13 — Income Taxes Effective Tax Rate The Company is a corporation and is subject to U.S. federal income tax. The Company uses an estimated annual effective tax rate for purposes of determining the income tax provision during interim reporting periods. In calculating the estimated annual effective tax rate, the Company considers forecasted annual pre-tax income and estimated permanent book versus tax differences. Adjustments to the effective tax rate and other income tax related estimates could occur during the year as information and assumptions change which could include, but are not limited to, changes to forecasted amounts, estimates of permanent book versus tax differences, and changes to tax laws and rates. The effective U.S. federal income tax rate applicable to the Company for the three months ended March 31, 2026 and 2025 was 25.3% and (30.6)%, respectively. The Company is subject to the Texas Margin Tax, which requires tax payments at a maximum statutory effective rate of 0.75% on the taxable margin of each taxable entity that does business in Texas. On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act ("OBBBA"). The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. ASC 740, "Income Taxes", requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. Certain elements of the OBBBA are not effective until 2026, which the Company has evaluated. As a result, the Company evaluated the legislation and determined it did not have a material effect on the provision for income taxes in 2026. Tax Attributes Historically, utilization of a portion of the Company's net operating loss carryforwards has been subject to limitations of utilization under Section 382 of the Internal Revenue Code of 1986 (“Section 382”), as amended. The Company incurred an ownership change, triggering another Section 382 loss limitation, during the three months ended June 30, 2023. As the Company continues to experience increasing profits, we believe we will fully utilize all deferred tax assets including those associated with the net operating loss carry-forward. Accordingly, the Company has not recorded a valuation allowance against any deferred tax assets as of March 31, 2026. Other Tax Matters Total income tax expense for the three months ended March 31, 2026 differed from amounts computed by applying the U.S. federal statutory tax rates to pre-tax income or loss primarily due to the impact of state income taxes as well as certain non-deductible expenses. The Company qualified for federal government assistance through employee retention credit ("ERC") provisions of the Consolidated Appropriations Act of 2021. As previously reported, the Company filed amended tax returns with the Internal Revenue Service ("IRS") claiming a refund of certain payroll taxes from 2020 and 2021. During 2025, the Company received a portion of the claimed refunds in cash and recognized such amounts in Other income in the periods received. As of March 31, 2026, the Company had not recognized a receivable for the remaining claimed amount and plans to record any additional refunds in the period received. The Company is subject to the following material taxing jurisdictions: the United States and Texas. As of March 31, 2026, the Company has no current tax years under audit. The Company remains subject to examination for federal income taxes and state income taxes for tax years 2022 through 2025. The Company has evaluated all tax positions for which the statute of limitations remains open and believes that the material positions taken would more likely than not be sustained upon examination. Therefore, as of March 31, 2026, the Company had not established any reserves for, nor recorded any unrecognized benefits related to, uncertain tax positions.
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