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Income Taxes
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9 Months Ended |
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Sep. 30, 2013
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| Income Tax Disclosure [Abstract] | |
| Income Taxes |
Income Taxes
The Company files a consolidated federal income tax return and certain combined state and local income tax returns with its subsidiaries. The Company's current tax year ends on December 31st. Income tax expense was $579 and $408 for the three months ended September 30, 2013 and 2012, respectively. Income tax expense includes the tax effect of goodwill, which is amortized for income tax purposes, of $298 and $210 for the three months ended September 30, 2013 and 2012, respectively. The remainder of the tax provision principally represents state and local income taxes for the 2013 and 2012 periods presented. The tax rate for the periods presented represents the actual effective tax rate for such periods, which the Company believes represents the best estimate of the annual effective tax rate.
Income tax expense was $1,718 and $1,060 for the nine months ended September 30, 2013 and 2012, respectively. Income tax expense includes the tax effect of goodwill, which is amortized for income tax purposes, of $885 and $692 for the nine months ended September 30, 2013 and 2012, respectively. The remainder of the tax provision principally represents state and local income taxes for the 2013 and 2012 periods presented. The tax rate for the periods presented represents the actual effective tax rate for such periods, which the Company believes represents the best estimate of the annual effective tax rate.
The effective tax rate differs from the statutory income tax rate for the 2013 periods primarily due to a tax provision related to amortization of goodwill for tax purposes and the increase in the valuation allowance against the net deferred tax asset attributable to the pre-tax loss for the nine month period. The effective tax rate differs from the statutory income tax rate for the 2012 periods primarily as a result of the change in fair value of contingent consideration not subject to income tax and the increase in the valuation allowance against the net deferred tax asset (without regard to deferred tax liabilities related to indefinite-lived intangibles) attributable to the pre-tax loss as adjusted for permanent differences.
In 2013, the Internal Revenue Service concluded an audit of the Company's income tax return for the year ended September 30, 2011. There was no material impact on the Company's consolidated financial statements as a result of the audit.
The Company changed its tax year to a calendar year beginning December 31, 2012.
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