INCOME TAXES

12 Months Ended

Dec. 31, 2020

INCOME TAXES

INCOME TAXES

NOTE 10 – INCOME TAXES

The components of the Company’s United States and foreign provision for income taxes were as follows for the years ended December 31 (in millions):

	2020		2019		2018
Current:
Federal	$	0.6	$	(0.3)	$	(0.1)
State		(1.7)		3.7		4.0
Foreign		0.8		—		—
Total current taxes		(0.3)		3.4		3.9
Deferred:
Federal		0.1		(45.5)		(10.9)
State		(0.5)		(11.6)		(7.4)
Foreign		0.5		(0.9)		(1.5)
Total deferred taxes		0.1		(58.0)		(19.8)
Benefit for income taxes	$	(0.2)	$	(54.6)	$	(15.9)

A reconciliation between the effective income tax rate and the United States statutory income tax rate for the years ended December 31, 2020, 2019 and 2018 is as follows (in millions):

	2020			2019			2018
Income tax expense (benefit) at United States statutory income tax rate	$	1.3		$	(76.1)		$	(4.4)
Federal income tax effects of:
State income tax expense, net of federal benefit		(1.6)			(6.2)			(2.7)
Foreign tax rate differential		0.1			(0.8)			(0.3)
Goodwill impairment		—			23.4			—
Per diem and other nondeductible expenses		1.4			2.3			4.1
Arbitrated decrease in contingent consideration		(2.9)			—			—
Change in valuation allowance		0.6			1.2			—
Cumulative effect of change in effective tax rate		—			—			(12.6)
Tax credits		(0.1)			(0.3)			(0.1)
Other		1.0			1.9			0.1
Income tax benefit	$	(0.2)		$	(54.6)		$	(15.9)
Effective tax rate		(3.3)	%		15.1	%		75.5	%

The decrease in the effective tax rate for the year ended December 31, 2020 compared to the year ended December 31, 2019 is primarily the result of the exclusion of nondeductible goodwill impairment. The decrease in the effective tax rate for the year ended December 31, 2019 compared to the year ended December 31, 2018 is primarily the result of a one-time benefit in 2018 related to the remeasurement of the net deferred tax liability as a result of the Tax Cuts and Jobs Act (TCJA) combined with the impairment of goodwill in 2019 for which there was no tax basis.

The effects of temporary differences that give rise to significant elements of deferred tax assets and liabilities at December 31, 2020 and 2019 were as follows (in millions):

	2020		2019
Deferred tax assets
Accrued expenses	$	7.4	$	5.5
Vacation accrual		0.6		0.6
Accounts receivable		0.9		0.8
Net operating losses		24.4		38.6
Deferred start-up costs		1.2		1.3
Stock based compensation		2.0		1.5
Operating lease liabilities		30.3		25.9
		66.8		74.2
Valuation allowance		(10.5)		(7.4)
Total deferred tax assets		56.3		66.8
Deferred tax liabilities
Prepaid expenses		(4.8)		(4.7)
481(a) adjustment		—		(0.9)
Intangible assets		(17.6)		(20.3)
Property and equipment		(75.6)		(87.2)
Right of Use Asset		(28.3)		(23.6)
Total deferred tax liabilities		(126.3)		(136.7)
Net deferred tax liability	$	(70.0)	$	(69.9)

As of December 31, 2020 and 2019, the Company’s valuation allowance against a portion of its foreign deferred tax assets that, in the judgement of management, are not more-likely-than-not to be realized was $10.5 million and $7.4 million, respectively. In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets depends upon future reversal of taxable and deductible temporary differences, the generation of future taxable income, and the feasibility of ongoing tax planning strategies during the periods in which those temporary differences are deductible.

At December 31, 2020, the Company has U.S. federal net operating loss carry forwards of approximately $51.7 million on a pre-tax basis. On an after-tax basis, the Company has state and foreign net operating losses of $1.1 million and $12.5 million, respectively. These loss carryforwards begin expiring in 2023.

The Company had no uncertain tax positions as of December 31, 2020 and 2019. The Company is no longer subject to United States federal income tax examinations by tax authorities for years before 2017; however, federal net operating loss carry forwards from years prior to 2017 remain subject to review and adjustment by tax authorities. The Company is no longer subject to state income tax examinations by tax authorities for years before 2016.