Income Taxes

12 Months Ended

Dec. 31, 2019

‎

11. Income Taxes

The provision for income taxes comprises the following (in thousands):


		For the Years Ended December 31,
		2019		2018		2017
Current
U.S. federal	$	36,779	$	23,934	$	11,724
U.S. state and local		7,078		4,484		4,144
Foreign		600		452		465
Deferred
U.S. federal, state and local		(2,773)		5,185		2,402
Foreign		2		1		5
Total	$	41,686	$	34,056	$	18,740

A summary of the temporary differences that give rise to deferred tax assets/ (liabilities) follows (in thousands):


		December 31,
		2019		2018
Accrued liabilities	$	32,498	$	30,702
Lease liabilities		32,476		-
Stock compensation expense		5,425		5,894
Implicit price concessions		4,165		1,171
State net operating loss carryforwards		2,678		2,422
Other		894		626
Deferred income tax assets		78,136		40,815
Amortization of intangible assets		(39,679)		(38,346)
Right of use lease assets		(28,807)		-
Accelerated tax depreciation		(21,942)		(19,685)
Currents assets		(2,510)		(1,861)
Market valuation of investments		(2,058)		(1,068)
State income taxes		(1,477)		(1,261)
Other		(167)		(192)
Deferred income tax liabilities		(96,640)		(62,413)
Net deferred income tax liabilities	$	(18,504)	$	(21,598)

At December 31, 2019 and 2018, state net operating loss carryforwards were $43.1 million and $39.3 million, respectively. These net operating losses will expire, in varying amounts, between 2024 and 2039. Based on our history of operating earnings, we have determined that our operating income will, more likely than not, be sufficient to ensure realization of our deferred income tax assets.

A reconciliation of the beginning and ending of year amount of our unrecognized tax benefit is as follows (in thousands):


		2019		2018		2017
Balance at January 1,	$	1,348	$	1,123	$	1,069
Unrecognized tax benefits due to positions taken in current year		234		453		268
Decrease due to expiration of statute of limitations		(259)		(228)		(214)
Balance at December 31,	$	1,323	$	1,348	$	1,123

We file tax returns in the U.S. federal jurisdiction and various states. The years ended December 31, 2016 and forward remain open for review for federal income tax purposes. The earliest open year relating to any of our major state jurisdictions is the fiscal year ended December 31, 2014. During the next twelve months, we do not anticipate a material net change in unrecognized tax benefits.

We classify interest related to our accrual for uncertain tax positions in separate interest accounts. As of December 31, 2019 and 2018, we have approximately $159,000 and $136,000, respectively, accrued in interest payable related to uncertain tax positions. These accruals are included in other current liabilities in the accompanying consolidated balance sheet. Net interest expense related to uncertain tax positions included in interest expense in the accompanying consolidated statement of income is not material.

The difference between the actual income tax provision for continuing operations and the income tax provision calculated at the statutory U.S. federal tax rate is explained as follows (in thousands):


		For the Years Ended December 31,
		2019			2018			2017

Income tax provision calculated using the statutory rate of 21%	$	54,938		$	50,316		$	40,921
Stock compensation tax benefits		(24,177)			(22,862)			(18,932)
State and local income taxes, less federal income tax effect		7,880			7,150			4,600
Nondeductible expenses		3,048			2,280			1,041
Enactment of the tax reform act		-			-			(8,305)
Other--net		(3)			(2,828)			(585)
Income tax provision	$	41,686		$	34,056		$	18,740
Effective tax rate		15.9	%		14.2	%		16.0	%

Summarized below are the total amounts of income taxes paid during the years ended December 31 (in thousands):


2019	$	44,063
2018		9,749
2017		42,311

Provision has not been made for additional taxes on $35.1 million of undistributed earnings of our domestic subsidiaries. Should we elect to sell our interest in these businesses rather than to affect a tax-free liquidation, additional taxes amounting to approximately $8.4 million would be incurred based on current income tax rates.