|12 Months Ended|
Dec. 31, 2020
12. Income Taxes
The provision for income tax expense (benefit) consists of the following:
A reconciliation of income tax expense computed at the federal statutory rate to the provision for income taxes for the years ended December 31, 2020, 2019 and 2018 is as follows:
Significant components of the Company’s deferred tax liabilities and assets are as follows:
Deferred income tax balances reflect the effects of temporary differences between the carrying amount of assets and liabilities and their tax bases and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered.
State operating loss carry forwards for tax purposes will result in future tax benefits of approximately $2,817. These loss carry-forwards will begin to expire in 2021. The Company evaluated the need to maintain a valuation allowance against certain deferred tax assets. Based on this evaluation, which included a review of recent profitability, future projections of profitability, and future deferred tax liabilities, the Company concluded that a valuation allowance of approximately $2,447 is necessary at December 31, 2020 for the state net operating loss carry-forwards which are likely to expire prior to the Company's ability to use the tax benefit. The Company also carries a valuation allowance for approximately $927 related to non-state net operating loss carry-forwards which are likely to expire prior to the Company’s ability to use the tax benefit.
A reconciliation of the beginning and ending liability for uncertain tax positions is as follows:
The amount of the unrecognized tax benefits that would affect the effective tax rate, if recognized, was approximately $1,954 at December 31, 2020. The Company recognizes interest and penalties related to the unrecognized tax benefits in income tax expense. Approximately $586 and $487 of accrued interest and penalties is reported as an income tax liability at December 31, 2020 and 2019, respectively. The liability for unrecognized tax benefits is reported in Other Long-term Liabilities on the Consolidated Balance Sheets at December 31, 2020 and 2019.
The Company files income tax returns in the United States (federal) and various states. Tax years open to examination by tax authorities under the statute of limitations include 2017, 2018 and 2019 for Federal and 2016 through 2019 for most states. Tax returns for the 2020 tax year have not yet been filed.
On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (“The Act”). Over the long term, the Company generally expects to benefit from the lower statutory rates provided by The Act. The Company operates solely in the United States; therefore, the international provisions of The Act do not apply. The only material item that impacted the Company in 2017 is the reduction in the deferred tax rate. As a result of the reduction in the U.S. corporate income tax rate from 35.0 percent to 21.0 percent under The Act, the Company recorded a reduction to its net deferred tax liability of $22,452, and a corresponding decrease to income tax expense in the Company’s Consolidated Statement of Operations for the year ended December 31, 2017.
No definition available.
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef