Note 13 - Income Taxes

12 Months Ended

Dec. 31, 2021

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,
	2021			2020			2019
Income before income taxes:
Domestic	$	307,260		$	146,055		$	188,174
Foreign		6,423			5,668			1,349
Total		313,683			151,723			189,523
Current provision
Federal	$	47,475		$	67,988		$	20,303
State		10,759			6,706			4,648
Total		58,234			74,694			24,951
Deferred provision (benefit)
Federal		13,809			(37,683	)		20,925
State		(631	)		(1,254	)		2,064
Foreign		856			1,079			−
Total		14,034			(37,858	)		22,989
Provision (benefit) for income taxes	$	72,268		$	36,836		$	47,940

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,
	2021			2020			2019
Income taxes at the federal statutory rate	$	65,694		$	31,862		$	39,530
State income taxes, net of federal benefit		7,874			4,487			5,303
Tax effect of permanent differences		(2,502	)		283			1,562
Foreign tax rate differential		(313	)		(111	)		−
Other, net		1,515			315			1,545
Provision (benefit) for income taxes	$	72,268		$	36,836		$	47,940

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

	December 31,
	2021			2020
Deferred income tax (assets) liabilities:
Inventory	$	(2,704	)	$	(4,329	)
Accounts receivable		(349	)		(168	)
Finance lease obligations		(27,242	)		(27,522	)
Finance and operating leases		(16,379	)		(13,607	)
Stock options		(6,993	)		(7,463	)
Accrued liabilities		(5,768	)		(7,680	)
State net operating loss carry forward		(1,438	)		(1,101	)
State tax credit		(120	)		(193	)
Other		(2,765	)		(3,302	)
Difference between book and tax basis- Operating lease assets		16,132			13,444
Difference between book and tax basis- Depreciation and amortization		188,099			178,360
Net deferred income tax liability	$	140,473		$	126,439

As of December 31, 2021, the Company had approximately $30.8 million in state net operating loss carry forwards that expire from 2021 to 2040, which result in a deferred tax asset of approximately $1.4 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 did not change over the prior year ending December 31, 2020.

The Company had unrecognized income tax benefits totaling $4.3 million as a component of accrued liabilities as of December 31, 2021, and $3.3 million at December 31, 2020, 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 $129,660, $6,150, and $5,220 in interest expense (income). No amounts were accrued for penalties. The Company had approximately $279,000, $150,000 and $144,000 of interest accrued as of December 31, 2021, 2020 and 2019, respectively.

Undistributed earnings of certain of the Company’s foreign subsidiaries amounted to approximately $13.4 million at December 2021. 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 distribution of untaxed earnings and profits.

The Company does not anticipate a significant change in the amount of unrecognized tax benefits in the next 12 months. As of December 31, 2021, the tax years ended December 31, 2018 through 2021 remained subject to audit by federal tax authorities and the tax years ended December 31, 2017 through 2021, remained subject to audit by state tax authorities.

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

	2021			2020			2019
Unrecognized tax benefits at beginning of period	$	3,306		$	3,007		$	2,389
Gross increases – tax positions in current year		1,512			651			1,188
Reductions due to lapse of statute of limitations		(509	)		(352	)		(570	)
Unrecognized tax benefits at end of period	$	4,309		$	3,306		$	3,007