The components of the Company’s income tax expense from operations for the years ended December 31, 2021, 2020 and 2019 consisted of (in thousands):

A reconciliation of income tax expense from operations to the federal statutory rate for the years ended December 31, 2021, 2020 and 2019 were as follows (in thousands):

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and operating loss and tax credit carryforwards. Significant items comprising the net deferred tax assets at December 31, 2021 and 2020 were (in thousands):


	2021		2020
Deferred tax liabilities
Operating lease assets	$	(63,143)	$	(67,400)
Other		(3,456)		(4,623)
		(66,599)		(72,023)
Deferred tax assets
Investment impairment		20,619		22,169
Investment in partnership ("Outside Basis Deferred Tax Asset")⁽¹⁾		271,513		241,805
Tax Receivable Agreement liability		46,328		36,486
Net operating loss carryforward		137,377		124,117
Operating lease liabilities		73,476		79,639
Other reserves		28,695		29,461
		578,008		533,677
Valuation allowance		(312,088)		(295,946)
Net deferred tax assets	$	199,321	$	165,708

(1)	This amount is the deferred tax asset the Company recognizes for its book to tax basis difference in its investment in CWGS, LLC.

At December 31, 2021, certain subsidiaries of CWH had federal and state net operating loss carryforwards of approximately $532.8 million and $450.7 million, respectively, which will be able to offset future taxable income. If not used, $55.5 million of federal and $450.7 million of state net operating losses will expire between 2022 and 2040, and $477.3 million will be carried forward indefinitely.

On January 1, 2019, the Company transferred certain assets relating to its Good Sam Club and co-branded credit card from its indirect wholly-owned subsidiary, GSS, an LLC, to its indirect wholly-owned subsidiary, CWI, a corporation. As a result of this transfer, the Company recorded $12.2 million of net income tax expense due to the revaluation of certain deferred tax assets and related changes in valuation allowance. As a result of transferring certain assets relating to its Good Sam Club and co-branded credit card from GSS to CWI, as described above, the Company also re-evaluated the impact on its Tax Receivable Agreement liability related to the reduction of future expected tax amortization. The reduction in future expected tax amortization reduced the Tax Receivable Agreement liability by $7.5 million.

As further described in Note 1 — Summary of Significant Accounting Policies — COVID-19, in response to the COVID-19 pandemic, many governments have enacted or are contemplating measures to provide aid and economic stimulus. These measures may include deferring the due dates of income tax and payroll tax payments or other changes to their income and non-income-based tax laws. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020 in the U.S., includes measures to assist companies, including temporary changes to income and non-income-based tax laws. For the years ended December 31, 2021 and 2020, there were no material impacts to the Company’s consolidated

financial statements as it relates to COVID-19 measures other than the deferral of non-income-based payroll taxes under the CARES Act of $29.2 million for the year ended December 31, 2020 of which $14.6 million was paid during the year ended December 31, 2021 and $14.6 million was included in accrued liabilities in the accompanying consolidated balance sheet at December 31, 2021.

At December 31, 2021, the Company determined that all of its deferred tax assets (except those of CW and the Outside Basis Deferred Tax Asset discussed below) are more likely than not to be realized. The valuation allowance for CW decreased by $3.9 million in the year ended December 31, 2021, compared to an increase of $19.7 million in the year ended December 31, 2020, primarily as a result of release of valuation allowance at CW, which is now available to offset state combined income in certain unitary states due to the Company’s increased ownership in CWGS, LLC. The valuation allowance release is attributable to the change in the entities within state combined filing groups due to unitary relationships, which provide additional taxable income sources to utilize CW’s deferred tax assets. CWH’s increased ownership in CWGS, LLC and other qualitative unity factors impacted the unitary relationships. Since it was determined that CW would not have sufficient taxable income in the current or carryforward periods under the tax law to realize the future tax benefits of its deferred tax assets, it continues to maintain a valuation allowance for the U.S. federal and non-unitary state jurisdictions. The Company maintains a partial valuation allowance against the Outside Basis Deferred Tax Asset pertaining to the portion that is not amortizable for tax purposes, since the Company would likely only realize the non-amortizable portion of the Outside Basis Deferred Tax Asset if the investment in CWGS, LLC was divested. The partial valuation allowance for the Outside Basis Deferred Tax Asset increased by $20.0 million in the year ended December 31, 2021, compared to an increase of $9.8 million in the year ended December 31, 2020. The increase in the year ended December 31, 2020 was primarily the result of increased ownership, net of a reduction in enacted state income tax rates. The Company and its subsidiaries file U.S. federal income tax returns and tax returns in various states. The Company is not under any material audits in any jurisdiction. With few exceptions, the Company is no longer subject to U.S. federal, state, and local income tax examinations by tax authorities for years before 2018.

As of December 31, 2021 and 2020, the balance of the Company’s uncertain tax positions was $2.9 million and $2.7 million, respectively. The Company does not expect the total amount of unrecognized tax benefits to significantly change in the next 12 months.

The Company is party to a tax receivable agreement (the “Tax Receivable Agreement”) that provides for the payment by the Company to the Continuing Equity Owners and Crestview Partners II GP, L.P. of 85% of the amount of tax benefits, if any, the Company actually realizes, or in some circumstances is deemed to realize, as a result of (i) increases in the tax basis from the purchase of common units from Crestview Partners II GP, L.P. in exchange for Class A common stock in connection with the consummation of the IPO and the related transactions and any future redemptions that are funded by the Company and any future redemptions or exchanges of common units by Continuing Equity Owners as described above and (ii) certain other tax benefits attributable to payments made under the Tax Receivable Agreement. The above payments are predicated on CWGS, LLC making an election under Section 754 of the Internal Revenue Code effective for each tax year in which a redemption or exchange (including a deemed exchange) of common units for cash or stock occur. These tax benefit payments are not conditioned upon one or more of the Continuing Equity Owners or Crestview Partners II GP, L.P. maintaining a continued ownership interest in CWGS, LLC. In general, the Continuing Equity Owners’ or Crestview Partners II GP, L.P.’s rights under the Tax Receivable Agreement are assignable, including to transferees of its common units in CWGS, LLC (other than the Company as transferee pursuant to a redemption or exchange of common units in CWGS, LLC). The Company expects to benefit from the remaining 15% of the tax benefits, if any, which may be realized. During the twelve months ended December 31, 2021 and 2020, 4,722,251 and 4,852,497 common units in CWGS, LLC, respectively, were exchanged for Class A common stock subject to the provisions of the Tax Receivable Agreement. The Company recognized a liability for the Tax Receivable Agreement payments due to those parties that redeemed common units, representing 85% of the aggregate tax benefits the Company expects to realize from the tax basis increases related to the exchange, after concluding it was probable that the Tax Receivable Agreement payments would be paid based on estimates of future taxable income. As of December 31, 2021, and December 31, 2020, the amount of Tax Receivable Agreement payments due under the Tax Receivable Agreement was $182.4 million and $145.9 million, respectively, of which $11.3 million and $8.1 million, respectively, were included in current portion of the Tax Receivable Agreement liability in the accompanying consolidated balance sheets.

From January 1, 2021 to December 31, 2021, Crestview Partners II GP, L.P. has redeemed 4.0 million common units in CWGS, LLC for 4.0 million shares of the Company’s Class A common stock as a result of transactions pursuant to a trading plan. Also from January 1, 2021 and December 31, 2021, CWGS Holding, LLC, a wholly owned subsidiary of ML Acquisition Company, LLC, which is indirectly owned by each of Stephen Adams, a member of Camping World’s board of directors, and Marcus Lemonis, the Company’s Chairman and Chief Executive Officer, exchanged 540,699 common units in CWGS, LLC for 540,699 shares of the Company’s Class A common stock. Payments pursuant to the Tax Receivable Agreement relating to these redemptions would begin during the year ended December 31, 2022.

For tax years beginning on or after January 1, 2018, CWGS, LLC is subject to partnership audit rules enacted as part of the Bipartisan Budget Act of 2015 (the “Centralized Partnership Audit Regime”). Under the Centralized Partnership Audit Regime, any IRS audit of CWGS, LLC would be conducted at the CWGS, LLC level, and if the IRS determines an adjustment, the default rule is that CWGS, LLC would pay an “imputed underpayment” including interest and penalties, if applicable. CWGS, LLC may instead elect to make a “push-out” election, in which case the partners for the year that is under audit would be required to take into account the adjustments on their own personal income tax returns. If CWGS, LLC does not elect to make a “push-out” election, CWGS, LLC has agreements in place requiring former partners to indemnify CWGS, LLC for their share of the imputed underpayment. The partnership agreement does not stipulate how CWGS, LLC will address imputed underpayments. If CWGS, LLC receives an imputed underpayment, a determination will be made based on the relevant facts and circumstances that exist at that time. Any payments that CWGS, LLC ultimately makes on behalf of its current partners will be reflected as a distribution, rather than tax expense, at the time such distribution is declared.