Note 14 - Income Taxes

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note 14 – Income Taxes

The income tax provision for the three months ended September 30, 2019 is $3,167,000 (an effective income tax rate of 14.0%). The income tax provision and effective tax rate for the three months ended September 30, 3019 were favorably impacted by the following: (1) a tax benefit of $2,064,000 related to statute of limitation expirations; and (2) a tax benefit of $793,000 related to a provision to return adjustment on the Company’s 2018 federal and state income tax returns. The income tax provision for the three months ended September 30, 2018 was $1,700,000 (an effective income tax rate of 7.5%). The income tax provision and effective tax rate for the three months ended September 30, 2018 were favorably impacted by the following: (1) a tax benefit of $547,000 related to the gain on acquisition of equity method investment; (2) a tax benefit of $2,222,000 related to statute of limitation expirations; and (3) a tax benefit of $1,434,000 related to a provision to return adjustment on the Company’s 2017 federal and state tax returns, resulting in a net decrease in the provision.

The income tax provision for the nine months ended September 30, 2019 is $15,284,000 (an effective tax rate of 22.0%). The income tax provision and effective tax rate for the nine months ended September 30, 2019 were favorably impacted by a tax benefit of $2,064,000 related to statute of limitation expirations and $793,000 related to a provision to return adjustment on the Company’s 2018 federal and state income tax returns. The income tax provision for the nine months ended September 30, 2018 was $9,792,000 (an effective tax rate of 19.5%). The income tax provision and effective tax rate for the nine months ended September 30, 2018 were unfavorably impacted by nondeductible expenses of $945,000 (primarily the non-deductible portion of the estimated potential settlement of the Caris HealthCare, L.P. Qui Tam legal matter) or 1.9% of income before taxes for the nine months. The income tax provision for the nine months ended September 30, 2018 was favorably impacted by the following: (1) a tax benefit of $547,000 related to the gain on acquisition of equity method investment; (2) a tax benefit of $2,222,000 related to statute of limitation expirations; and (3) a tax benefit of $1,434,000 related to a provision to return adjustment on the Company’s 2017 federal and state income tax returns.

Interest and penalties expense related to U.S. federal and state income tax returns are included within income tax expense.

The Company is no longer subject to U.S. federal and state examinations by tax authorities for years before 2016 (with certain state exceptions).