Income Taxes

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

6. Income Taxes

The provision (benefit) for income taxes consists of:

	Year Ended December 31,
	2019		2018			2017
	(In thousands)
Current:
Federal	$	719	$	3,041		$	1,280
State		125		658			159
Total current		844		3,699			1,439
Deferred:
Federal		400		(1,246	)		1,259
State		31		(98	)		55
Total deferred		431		(1,344	)		1,314
Total	$	1,275	$	2,355		$	2,753

A reconciliation of the U.S. Federal statutory tax rate to the effective tax rate on income before taxes is as follows:

	Year Ended December 31,
	2019			2018			2017
Federal statutory rate		21.0	%		21.0	%		35.0	%
State taxes, net of federal benefit		3.4			4.3			4.2
Impairment, non-deductible portion		—			0.1			—
Share-based compensation		3.7			1.2			15.2
Non-deductible items		5.4			2.1			4.6
Valuation allowance		—			(9.5	)		41.0
Tax reform rate change		—			—			12.9
Other		(0.2	)		2.2			(4.1	)
Total effective tax rate		33.3	%		21.4	%		108.8	%

Significant components of the Company’s deferred taxes were as follows:

	Year Ended December 31,
	2019			2018
	(In thousands)
Deferred tax assets:
Operating lease right-of-use assets	$	3,425		$	—
Inventory reserve		1,072			1,179
Uniform capitalization adjustment		1,633			1,469
Stock compensation expense		666			681
Accrued commission		124			348
Other		199			276
Total deferred tax assets		7,119			3,953
Deferred tax liabilities
Operating lease right-of-use assets		(3,316	)		—
Goodwill		(838	)		(649	)
Intangible assets		(2,230	)		(2,315	)
Other		(135	)		(59	)
Total deferred tax liabilities		(6,519	)		(3,023	)
Net deferred tax assets	$	600		$	930

On December 22, 2017, the United States enacted significant changes to the U.S. tax law following the passage and signing of H.R.1, “An Act to Provide the Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018” (previously known as “The Tax Cuts and Jobs Act”). In March 2018, the FASB issued ASU 2018-05, “Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SEC Update).” This ASU added the SEC guidance released on December 22, 2017 regarding the income tax accounting implication of the Tax Cuts and Jobs Act to ASC Topic 740. During 2017, the Company recorded income tax expense of $0.3 million to reflect the reduction in the U.S. corporate income tax rate from 35% to 21%. As of December 31, 2018, the Company completed its analysis of its accounting for the income tax effects of tax reform and as a result no additional adjustments were recorded.

The Company does not have any unrecognized tax benefits recorded at December 2019, 2018 and 2017. The Company recognizes interest on any tax issue as a component of interest expense and any related penalties in other operating expenses. As of December 31, 2019, 2018 and 2017, the Company recorded no provision for interest or penalties related to uncertain tax positions. The tax years 2015 through 2019 remain open to examination by the major taxing jurisdictions to which the Company is subject.