Note 7 - Income Taxes

6 Months Ended

Jun. 30, 2021

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE 7—INCOME TAXES:

Due to a change in forecasted earnings, the Company recorded its provision for income taxes for the three and six months ended June 30, 2021 of ($8,893) and ($3,708), respectively, based on its annual estimated income tax rate adjusted for discrete items. This was different than the year-to-date actual calculation used for the three months ended March 31, 2021. The effective tax rate for the three and six months ended June 30, 2021 differs from the U.S. federal statutory rate of 21%, primarily due to the income tax benefit for excess percentage depletion, partially offset by tax expense related to compensation. These tax provision amounts also include discrete tax adjustments related to prior years' taxes, state tax law changes and equity compensation.

The provision for income taxes for the three and six months ended June 30, 2020 was ($7,683) and ($5,775), respectively, which was based on the Company's annual estimated income tax rate adjusted for discrete items. The effective tax rate for the three and six months ended June 30, 2020 differed from the U.S. federal statutory rate of 21%, primarily due to the income tax benefit of percentage depletion, partially offset by tax expense related to equity compensation. These tax provision amounts also include discrete tax adjustments related to tax law changes and equity compensation.

The Company utilizes the “more likely than not” standard in recognizing a tax benefit in its financial statements. For the six months ended June 30, 2021 and the year ended December 31, 2020, the Company did not have any unrecognized tax benefits. 

The Company is subject to taxation in the United States and its various states, as well as Canada and its various provinces. Under the provisions of the tax matters agreement entered into between the Company and its former parent on November 28, 2017 (the “TMA”), certain subsidiaries of the Company are subject to examination for the period January 1, 2017 through November 28, 2017. As a separate taxpayer, the Company is subject to examination for the period November 28, 2017 through  December 31, 2020 for federal and state returns.