Note 13 - Income Taxes

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

Income Tax Disclosure [Text Block]

13. INCOME TAXES:

The tax provisions are summarized as follows (in thousands):

	Year Ended December 31,
	2020			2019		2018
Income before income taxes:
Domestic	$	146,055		$	188,174	$	183,169
Foreign		5,668			1,349		-
Total		151,723			189,523		183,169
Current provision
Federal	$	67,988		$	20,303	$	31,819
State		6,706			4,648		6,291
Total		74,694			24,951		38,110
Deferred provision
Federal		(37,683	)		20,925		6,082
State		(1,254	)		2,064		(85	)
Foreign		1,079			-		-
Total		(37,858	)		22,989		5,997
Provision (benefit) for income taxes	$	36,836		$	47,940	$	44,107

A reconciliation of taxes based on the federal statutory rates and the provisions (benefits) for income taxes are summarized as follows (in thousands):

	Year Ended December 31,
	2020			2019		2018
Income taxes at the federal statutory rate	$	31,862		$	39,530	$	38,469
State income taxes, net of federal benefit		4,487			5,303		4,913
Tax effect of permanent differences		283			1,562		596
Foreign tax rate differential		(111	)		-		-
Other, net		315			1,545		129
Provision (benefit) for income taxes	$	36,836		$	47,940	$	44,107

The following summarizes the components of net deferred income tax liabilities included in the balance sheet (in thousands):

	December 31,
	2020			2019
Deferred income tax (assets) liabilities:
Inventory	$	(4,329	)	$	(5,086	)
Accounts receivable		(168	)		(140	)
Finance lease obligations		(27,522	)		(21,618	)
Finance and operating leases		(13,607	)		(12,726	)
Stock options		(7,463	)		(8,749	)
Accrued liabilities		(7,680	)		(2,989	)
State net operating loss carry forward		(1,101	)		(2,381	)
State tax credit		(193	)		(196	)
Other		(3,302	)		(3,817	)
Difference between book and tax basis- Operating lease assets		13,444			12,628
Difference between book and tax basis- Depreciation and amortization		178,360			209,250
		126,439			164,176
Valuation allowance		-			121
Net deferred income tax liability	$	126,439		$	164,297

As of December 31, 2020, the Company had approximately $22.8 million in state net operating loss carry forwards that expire from 2020 to 2039, which result in a deferred tax asset of $1.1 million. The Company has evaluated whether its state net operating losses are realizable and has not recorded a valuation allowance against them. The valuation allowance decreased $121,000 over the prior year ending December 31, 2019.

The Company had unrecognized income tax benefits totaling $3.3 million as a component of accrued liabilities as of December 31, 2020, and $3.0 million at December 31, 2019, the total of which, if recognized, would impact the Company’s effective tax rate. An unfavorable settlement would require a charge to income tax expense and a favorable resolution would be recognized as a reduction to income tax expense. The Company recognizes interest accrued related to unrecognized tax benefits in income tax expense. During the years ended December 31, 2020, 2019 and 2018, the Company recognized approximately $6,150, $5,220, and $(27,450) in interest expense (income). No amounts were accrued for penalties. The Company had approximately $150,000, $144,000 and $139,000 of interest accrued as of December 31, 2020, 2019 and 2018, respectively.

Undistributed earnings of certain of the Company’s foreign subsidiaries amounted to approximately $7.0 million at December 2020. Those earnings are considered to be indefinitely reinvested. Upon repatriation of those earnings in the form of dividends or otherwise, the Company may be subject to state and local taxes, and/or withholding taxes payable to the various foreign countries. The Company expects to be able to take a 100% dividends received deduction to offset any U.S. federal income tax liability on the undistributed earnings.

The Company does not anticipate a significant change in the amount of unrecognized tax benefits in the next 12 months. As of December 31, 2020, the tax years ended December 31, 2017 through 2020 remained subject to audit by federal tax authorities and the tax years ended December 31, 2016 through 2020, remained subject to audit by state tax authorities.

The table below presents the reconciliation of the change in the unrecognized tax benefits (in thousands):

	2020			2019			2018
Unrecognized tax benefits at beginning of period	$	3,007		$	2,389		$	2,555
Gross increases – tax positions in current year		651			1,188			504
Reductions due to lapse of statute of limitations		(353	)		(570	)		(670	)
Unrecognized tax benefits at end of period	$	3,306		$	3,007		$	2,389