Note 11 - Income Taxes

9 Months Ended

Sep. 30, 2021

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note 11 – Income Taxes

The Company is subject to income tax in multiple jurisdictions and the use of estimates is required to determine the provision for income taxes. For the three months ended  September 30, 2021 and 2020, the Company recorded an income tax provision of $2.2 million and $3.7 million, respectively. For the nine months ended  September 30, 2021 and 2020, the Company recorded an income tax provision of $5.8 million and $10.1 million, respectively. The income tax provision is based on the estimated annual effective tax rate for the year applied to pre-tax income. The effective income tax rate for the three months ended  September 30, 2021 was 31.5 percent compared to 20.1 percent in the same period of the prior year. The effective tax rate increased by 11.4 percent for the three months ended  September 30, 2021 when compared to the same period in 2020, primarily due to an increase in losses in jurisdictions that are not eligible for tax benefits due to valuation allowances. The effective income tax rate for the nine months ended  September 30, 2021 was 21.2 percent compared to 19.7 percent in the same period of the prior year. The effective tax rate increased by 1.5 percent for the nine months ended  September 30, 2021 when compared to the same period in 2020, primarily due to an increase in losses in jurisdictions that are not eligible for tax benefits due to valuation allowances.

The effective income tax rate for the nine months ended September 30, 2021 differs from the U.S. federal statutory rate of 21.0 percent due to various factors, including operating in multiple state and foreign jurisdictions and tax credits for which the Company qualifies.

The Company had unrecognized tax benefits totaling $5.0 million as of September 30, 2021 and $4.8 million as of  December 31, 2020, respectively, all of which, if recognized, would affect the Company’s effective tax rate. The Company recognizes interest and penalties related to income tax matters in income tax expense, and reports the liability in current or long-term income taxes payable as appropriate.

On March 11, 2021, the President signed into law the ARP Act, a legislative package which is generally not significant to the Company's current tax footprint; however, the Company will continue to assess the ARP Act on an ongoing basis. Similar tax provisions and other stimulus measures have been granted either before or after June 30, 2021 by certain foreign and U.S. state jurisdictions, which the Company continues to evaluate and apply, if applicable.