Partnership is now a regarded partnership under federal tax law, and the Operating Partnership’s accompanying consolidated financial statements include the related provision balances for federal income taxes. Certain subsidiaries have made an election with the Company to be treated as TRSs in conjunction with the Company’s REIT election; the TRS elections permit us to engage in certain business activities in which the REIT may not engage directly. A TRS is subject to federal and state income taxes on the income from these activities. A provision for taxes of the TRSs and of foreign branches of the REIT is included in our consolidated financial statements.

The Company recorded an opening deferred tax liability of $213.8 million as part of its acquisition accounting on the 2020 acquisitions discussed in Note 3. This deferred tax liability primarily arose from book to tax basis differences in land, buildings and equipment and intangible assets acquired offset by certain liabilities assumed in the acquisition. Acquisition accounting related to the deferred income tax assets and liabilities acquired in the acquisitions is preliminary for Hall’s and Agro and are subject to change as additional information is obtained.

The Company continues to assert that the undistributed earnings of its Argentine subsidiary are permanently reinvested. Undistributed earnings of the Argentine subsidiary amounted to approximately $13.7 million at December 31, 2020. The Company changed its assertion for the earnings of its Canadian subsidiaries in 2018 due to the Company’s plans to remit cash in the future. During 2019 the Company recognized a deferred tax liability for the outside basis difference of $0.4 million in its Canadian subsidiaries that remains unchanged in 2020. The Company intends to liquidate its Hong Kong subsidiaries in 2021 and is no longer asserting permanent reinvestment although that did not result in the recognition of deferred taxes. No additional income taxes have been provided for any additional outside basis differences in selected foreign entities that are indefinitely reinvested. No income tax has been accrued for the investment in foreign Agro subsidiaries acquired in 2020 because the Company has elected to be indefinitely reinvested with regard to outside basis only in the investment of the foreign subsidiaries.

The GILTI provisions of the TCJA impose a tax on the income of certain foreign subsidiaries in excess of a specified return on tangible assets used by the foreign companies. The Company continues to account for the GILTI inclusion as a period cost and thus has not recorded any deferred tax liability associated with GILTI. There was no taxable deemed dividend recorded for the Company for the 2020 and 2019 tax year. The taxable deemed dividend recorded for the Company for the 2018 tax year is $0.2 million. Also, as a result of IRS guidance issued during the third quarter of 2018, the Company now includes any GILTI as REIT qualified income.


	2020		2019		2018
	(In thousands)
Current
U.S. federal	$	1,085	$	(20)	$	4,424
State	(447)		(670)		(353)
Foreign	(7,443)		(4,854)		(3,604)
Total current portion	(6,805)		(5,544)		467

Deferred
U.S. federal	8,588		7,701		2,094
State	2,929		2,217		494
Foreign	2,215		783		564
Total deferred portion	13,732		10,701		3,152
Total income tax benefit	$	6,927	$	5,157	$	3,619

Income tax benefit attributable to income before income taxes differs from the amounts computed by applying the U.S. statutory federal income tax rate of 21% to income before income taxes. The reconciliation between the statutory rate and reported amount is as follows:


	2020		2019		2018
	(In thousands)
Income taxes at statutory rates	$	(3,702)	$	(9,031)	$	(9,317)
Earnings from REIT - not subject to tax	2,681		9,526		9,015
State income taxes, net of federal income tax benefit	(446)		(542)		(187)
Provision to return	(4)		2		360
Rate and permanent differences on non-U.S. earnings	(1,175)		(971)		(1,228)
Change in valuation allowance	9,506		2,761		(2,227)
Non-deductible expenses	387		3,462		4,021
Change in uncertain tax positions			(367)		347
Income withholding tax	(1,191)		(212)		(301)
Effect of Tax Cuts and Jobs Act	—		—		3,797

Other	871		529		(661)
Total	$	6,927	$	5,157	$	3,619


	2020		2019
	(In thousands)
Deferred tax assets:
Net operating loss and credits carryforwards	$	21,347	$	11,806
Accrued expenses	28,707		26,911
Share-based compensation	6,042		4,618
Lease obligations	10,382		9,674
Other assets	1,361		4,420
Total gross deferred tax assets	67,839		57,429
Less: valuation allowance	(9,158)		(16,043)
Total net deferred tax assets	58,681		41,386

Deferred tax liabilities:
Intangible assets and goodwill	(80,015)		(8,739)
Property, buildings and equipment	(187,114)		(38,358)
Lease right-of-use assets	(10,301)		(9,674)
Other liabilities	(927)		(1,316)
Total gross deferred tax liabilities	(278,357)		(58,087)
Net deferred tax liability	$	(219,676)	$	(16,701)

As of December 31, 2020, the U.S. TRS has gross U.S. federal net operating loss carryforwards of approximately $44.7 million, of which $15.3 million was generated prior to 2018 and will expire between 2032 and 2036. The remaining $29.4 million in losses have no expiration, but can only be used to offset up to 80% of future taxable income annually. These losses are subject to an annual limitation under IRC section 382 as a result of our IPO and a subsequent ownership change that occurred in March of 2019; however, the limitation should not impair the Company’s ability to utilize the losses. The Company has $87.1 million in REIT U.S. federal net operating loss carryforwards which were obtained through acquisitions. These losses are also subject to an annual limitation under IRC section 382; no deferred tax value has been recorded as they can only be used to reduce required distributions to shareholders, of which none has been used for this purpose.

The Company has gross state net operating loss carryforwards of approximately $40.3 million from its TRSs, of which $32.6 million will expire at various times between 2021 and 2040. The remaining $7.7 million was generated after 2017 and have no expiration. The Company received $2.2 million of its remaining outstanding alternative minimum tax credit refund in 2020. Additionally, the Company has a federal research and experimentation credit of approximately $1.2 million that will expire between 2036 and 2040.

Annually we consider whether it is more-likely-than-not that the deferred tax assets will be realized. In making this assessment, we consider recent operating results, the expected scheduled reversal of deferred tax liabilities, projected future taxable benefits and tax planning strategies. As of December 31, 2020, we recorded a valuation allowance of $9.2 million for the portion of the deferred tax asset that we do not expect to be realized. The valuation allowance on our net deferred taxes decreased by $6.8 million from $16.0 million in 2019 to $9.2 million in 2020. The changes in valuation allowance are primarily due to certain deferred tax liabilities totaling $11.5 million from acquisitions during the year would be available to offset deferred tax assets for one of our U.S. TRSs that were historically subject to a valuation allowance. The $11.5 million reduction in valuation


	Tax		Interest		Penalties		Total
	(In thousands)
Balance at December 31, 2018*	$	431	$	—	$	—	$	431
Increase related to current-year tax positions	367		—		—		367
Decreases due to lapse in statute of limitations	(431)		—		—		(431)
Balance at December 31, 2019*	367		—		—		367

Decreases due to settlement with tax authority	(211)						(211)

Balance at December 31, 2020*	$	156	$	—	$	—	$	156

The Company’s unrecognized tax benefits include exposures related to positions taken on U.S. federal, state, and foreign income tax returns as of December 31, 2020. Due to a settlement with a taxing authority during 2020, the Company reduced its unrecognized tax benefits related to a foreign exposure to $0.2 million at the end of 2020.

In the normal course of business, the Company’s tax returns are subject to examination by various taxing authorities. While the Company believes that it is adequately reserved for possible audit adjustments, the final resolution of these examinations cannot be determined with certainty and could result in final settlements that differ from current estimates. The Company accrues interest and penalties related to unrecognized tax benefits as a component of income tax expense.

As of December 31, 2020, the Company is generally no longer subject to U.S. federal, state, local, or foreign examinations by tax authorities for years before 2017. However, for U.S. income tax purposes, the 2012 and 2013 tax years were open, to the extent that net operating losses were generated in those years and continue to be subject to adjustments from taxing authorities in the tax year they are utilized.