Income Taxes

3 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

Our effective tax rate, exclusive of non-controlling interests, for the three months ended March 31, 2019 and 2018 was 25.0% and 23.4%, respectively.

Cash paid for income taxes was a net refund of $32.2 million and a net payment of $0.4 million for the three months ended March 31, 2019 and 2018, respectively. The net refund received for the three months ended March 31, 2019 was primarily related to the receipt of funds from amended returns filed during 2018.

We have deferred tax assets related to state net operating loss carryforwards. We provide a partial valuation allowance due to uncertainty surrounding the future utilization of these carryforwards in the taxing jurisdictions where the loss carryforwards exist. When determining the need for a valuation allowance, we consider all positive and negative evidence, including recent financial results, scheduled reversals of deferred tax liabilities, projected future taxable income and tax planning strategies.

As a result of changes in U.S. tax law and our ongoing efforts to evaluate, streamline and maximize the efficiency of our tax footprint, we could adjust our valuation allowance in a future period if there is sufficient evidence to support a conclusion that it is more certain than not that a portion of the state net operating loss carryforwards, on which we currently provide a valuation allowance, would be realized. Future changes in our valuation allowance could have a material effect on our results of operations in the period recorded.

The realization of our deferred tax asset for state loss carryforwards ultimately depends upon the existence of sufficient taxable income in the appropriate state taxing jurisdictions in future periods. The weight given to the positive and negative evidence is commensurate with the extent such evidence can be objectively verified. We continue to regularly monitor both positive and negative evidence in determining the ongoing need for a valuation allowance. As of March 31, 2019, the valuation allowance associated with our state loss carryforwards was approximately $73 million.

We are subject to income tax in the United States and Puerto Rico, as well as in multiple state jurisdictions. Our compliance with income tax rules and regulations is periodically audited by taxing authorities. These authorities may challenge the positions taken in our tax filings. We are currently under examination or administrative review by the Internal Revenue Service, state and local taxing authorities and Puerto Rico for various tax years.

We believe that our recorded liabilities for uncertain tax positions are adequate. However, a significant assessment against us in excess of the liabilities recorded could have a material adverse effect on our consolidated financial position, results of operations and cash flows. As of March 31, 2019, we are unable to estimate the resolution of our gross unrecognized benefits over the next twelve months.

We recognize interest and penalties as incurred within the provision for income taxes in the consolidated statements of income. As of March 31, 2019, we accrued a liability for penalties of $0.5 million and a liability for interest (including interest on penalties) of $12.0 million related to our uncertain tax positions.