Annual report pursuant to Section 13 and 15(d)

INCOME TAXES

v3.22.0.1
INCOME TAXES
12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The provision (benefit) for income taxes for the years ended December 31, 2021 and 2020 consisted of the following:
Year Ended
December 31,
2021
December 31,
2020
December 31,
2019
Income Tax Expense (benefit)
Current federal tax expense (benefit)
Federal
$ (115) $ 1,732  $ 479 
State
949  768  — 
Deferred tax (benefit)
Federal
1,473  1,706  (479)
State
136  227  — 
Valuation allowance
—  (1,182) — 
Total
$ 2,443  $ 3,251  $ — 
A summary of deferred tax assets and liabilities as of December 31, 2021 and 2020 is as follows:
Year Ended
December 31,
2021
December 31,
2020
Deferred tax assets:
Deferred right to use lease liabilities
11,573  3,249 
Stock based compensation
974  757 
Inventory reserves
239  236 
Warranty reserves
128  146 
Accruals and other
1,266  180 
14,180  4,568 
Deferred tax liabilities:
Deferred right to use lease assets
(11,147) (3,147)
Accumulated depreciation and amortization
(5,392) (2,171)
(16,539) (5,318)
Deferred tax asset (liability) (2,359) (750)
Valuation Allowance
—  — 
Deferred tax asset (liability), net
$ (2,359) $ (750)
We recorded a valuation allowance against all of our deferred tax assets as of December 31, 2019. Given our current earnings and anticipated future earnings, we believe that there was sufficient positive evidence available that allowed us to reach the conclusion that the valuation allowance was no longer be needed as of December 31, 2020. Release of the valuation allowance in 2020 resulted in the recognition of certain deferred tax assets and a decrease to income tax expense for the period the release is recorded.
As of December 31, 2021 and 2020 the Company had cumulative state net operating loss carryforwards of $1.6 million and $0.1 million. State net operating loss carryforwards will begin to expire in calendar year 2036.
The differences between the U.S. Federal statutory income tax rate and the Company’s effective tax rate were as follows for the years ended December 31, 2021 and 2020, and 2019:
Years Ended December 31,
2021 2020 2019
Federal statutory tax rate 21  % 21  % 21  %
State and local income taxes (net of federal tax benefit) % % %
28  % 27  % 25  %
Other —  % % —  %
Stock-based compensation (8) % % —  %
Return to provision adjustments (4) % 12  % —  %
Valuation allowance —  % (14) % (25) %
16  % 38  % —  %