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Income Taxes - REIT (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of Income Before Income Tax Expense (Benefit)

Income (loss) before income tax expense for the years ended December 31, 2019, 2018 and 2017 consists of the following (in thousands):


	Year Ended December 31, 2019		Year Ended December 31, 2018		Year Ended December 31, 2017
U.S.	$	194,143	$	254,172	$	244,995
Canada	310		(340)		(13,293)
Total	$	194,453	$	253,832	$	231,702

Components of Expense (Benefit) for Income Taxes

The components of income tax expense (benefit) for the years ended December 31, 2019, 2018 and 2017 are as follows (in thousands):


	Year Ended December 31, 2019		Year Ended December 31, 2018		Year Ended December 31, 2017
Federal (including foreign):
Current	$	28,297	$	31,401	$	49,307
Deferred	(6,697)		711		1,675
State:
Current	9,134		9,656		9,244
Deferred	(1,419)		308		(712)
Total	$	29,315	$	42,076	$	59,514

Schedule of Difference Between Income Tax Expense at Effective Tax Rate and Statutory U.S. Federal Income Tax Rate

The differences between income tax expense at the effective tax rate and the statutory U.S. federal income tax rate for the years ended December 31, 2019, 2018 and 2017 are as follows (in thousands):


	Year Ended December 31, 2019						Year Ended December 31, 2018						Year Ended December 31, 2017
Tax at statutory rate	$	40,835	21.0	%	$	53,305	21.0	%	$	81,096	35.0	%
State income tax	5,844		3.0		7,847		3.1		5,578		2.4
Foreign income tax rate differential	—		—		—		—		(4,741)		(2.0)

Nontaxable ESH REIT income	(18,577)		(9.6)		(14,976)		(5.9)		(25,689)		(11.1)

Equity-based compensation	(69)		—		(524)		(0.2)		(263)		(0.1)
Other permanent differences	629		0.3		30		—		3,283		1.4
Estimate of future nontaxable distributions from ESH REIT	—		—		5,020		2.0		(2,054)		(0.9)
Change in ESH REIT temporary differences	475		0.3		(9,525)		(3.7)		(2,102)		(0.9)
Change in deferred tax rate⁽¹⁾	—		—		—		—		4,051		1.7
Valuation allowance	(1)		—		(2)		—		(427)		(0.2)
Tax credits	(783)		(0.4)		(661)		(0.3)		(497)		(0.2)
Other - net	962		0.5		1,562		0.6		1,279		0.6
Income tax expense - net	$	29,315	15.1	%	$	42,076	16.6	%	$	59,514	25.7	%

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(1)Reflects the impact of the TCJA on Corporation deferred tax assets, specifically the remeasurement of deferred tax assets at December 31, 2017, using newly enacted tax rates, which resulted in deferred income tax expense.

Components of Deferred Tax Assets and Liabilities

The significant components of deferred tax assets and deferred tax liabilities as of December 31, 2019 and 2018, consist of the following (in thousands):


	December 31, 2019		December 31, 2018
Deferred tax assets:
Net operating loss carryforwards	$	2,914	$	2,926
Accruals and allowances	19,484		10,861
Equity-based compensation	972		1,409
Depreciable property	2,890		3,211
Other	665		652
Total deferred tax assets	26,925		19,059
Valuation allowance	(2,914)		(2,926)
Net deferred tax assets	24,011		16,133
Deferred tax liabilities:
Undistributed ESH REIT income	(5,074)		(5,578)
Intangible assets	(2,112)		(2,600)
Prepaid expenses	(668)		(629)
Other	—		(17)
Total net deferred tax assets:	$	16,157	$	7,309

ESH Hospitality, Inc.

Entity Information [Line Items]