Note 14 - Income Taxes

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Income Tax Disclosure [Text Block]

14. Income Taxes

For the three and six months ended June 30, 2020, the Company recorded an income tax benefit of $16.9 million and $26.9 million, respectively.  The Company's effective tax rates for the three and six months ended June 30, 2020 include the benefit associated with net operating loss carrybacks to years when the Company was subject to a 35% federal tax rate.  The effective tax rates for both 2020 periods differ from the federal statutory rate due the net operating loss carryback benefit, discrete items, state income tax rates and tax credits for energy efficient homes.  The discrete benefit for the three months ended June 30, 2020 totaled $1.8 million and was primarily related to the CARES Act signed into law on March 27, 2020.  Discrete items for the six months ended June 30, 2020 totaled a $9.9 million benefit, $5.8 million of which related to the $14.0 million project abandonment costs recorded during the 2020 first quarter and a $3.9 million benefit related to the CARES Act.  For more information on the abandonment costs, please refer to Note 4.  The CARES Act allows companies to carry back net operating losses generated in 2018 through 2020 for five years.  For the three and six months ended June 30, 2020, the Company recognized a $1.8 million and $3.9 million discrete benefit, respectively, related to the remeasurement of deferred tax assets originally valued at a 21% federal statutory tax rate which are now available to be carried back to tax years with a 35% federal statutory rate. 

For the three and six months ended June 30, 2019, the Company recorded an income tax provision of $1.0 million and $0.3 million, respectively.  The Company's effective tax rates for 2019 periods differ from the federal statutory tax rates due to state income taxes, estimated deduction limitations for executive compensation and discrete items. The provision for discrete items totaled $0.3 million for the six months ended June 30, 2019 related to stock compensation and state income tax rate changes. 

The components of our deferred tax asset, net are as follows:

	June 30,			December 31,
	2020			2019
	(Dollars in thousands)
Net operating loss	$	8,080		$	3,848
Reserves and accruals		2,637			2,563
Share based compensation		1,479			1,392
Inventory		4,278			3,536
Investments in joint ventures		392			7,080
Other		23			27
Capital loss		140			—
Valuation allowance		(140	)		—
Depreciation and amortization		(392	)		(393	)
Right of use asset		(631	)		(550	)
Deferred tax asset, net	$	15,866		$	17,503