Income Taxes

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The provision for income taxes is based on the earnings reported in the accompanying consolidated financial statements. The Company recognizes deferred income tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred income tax liabilities and assets are determined based on the cumulative temporary differences between the financial statement and tax basis of assets and liabilities using enacted tax rates expected to be applied to taxable income in years which those temporary differences are expected to be recovered or settled. Deferred income tax expense is measured by the net change in deferred income tax assets and liabilities during the year.

The foreign components of income before the provision for income taxes were not material for the years ended December 31, 2020, 2019 and 2018. The components of the provision for income taxes are as follows:

	2020		2019		2018
Currently payable:
Federal	$	67,606,617	$	73,563,685	$	83,010,387
State	10,180,218		3,765,929		3,743,781
Foreign	1,882,195		1,468,018		1,776,837
Total	79,669,030		78,797,632		88,531,005
Deferred income tax benefit:
Primarily federal	(15,419,722)		(3,066,237)		(4,367,155)
Provision for income taxes	$	64,249,308	$	75,731,395	$	84,163,850

The effective income tax rates are different from the statutory federal income tax rates for the following reasons:

	2020		2019		2018
Statutory federal income tax rate	21.0	%	21.0	%	21.0	%
State income taxes, net of federal income tax benefit	2.1		0.6		0.6
Research tax credit	(1.4)		(1.1)		(0.8)
(Decrease) Increase in reserve for uncertain tax provisions	(0.1)		0.3		0.1
Change in tax rate on deferred taxes	—		—		0.5
Foreign tax credit	(0.1)		(0.1)		(0.1)
Foreign derived intangible income deduction	(5.2)		(4.8)		(4.6)
Stock compensation	(1.0)		(1.1)		(1.0)
Other	0.3		0.3		0.4
Effective income tax rate	15.6	%	15.1	%	16.1	%

The tax effect of temporary differences which give rise to deferred income tax assets and liabilities at    December 31, 2020 and 2019, are as follows: 

	December 31,
	2020		2019
Assets:
Accruals not currently deductible	$	13,135,048	$	6,478,146
Stock based compensation	11,983,900		9,100,745
Other	1,163,204		66,830
Total deferred income tax assets	$	26,282,152	$	15,645,721
Liabilities:
Excess tax over book depreciation	$	(16,606,068)	$	(30,725,471)
Goodwill	(33,427,901)		(27,799,640)
Intangible assets	(11,237,588)		(6,171,628)
Other	(3,971,338)		(2,403,131)
Total deferred income tax liability	$	(65,242,895)	$	(67,099,870)
Net deferred income taxes	$	(38,960,743)	$	(51,454,149)

Income taxes paid in cash were approximately $61.9 million, $74.9 million and $86.9 million in 2020, 2019 and 2018, respectively.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	2020		2019		2018
Beginning of year	$	6,392,000	$	4,678,000	$	4,435,000
Additions based on tax positions related to the current year	918,000		1,695,000		1,677,000
Additions for tax positions in prior years	770,000		657,000		283,000
Reductions for tax positions in prior years	(2,907,000)		(38,000)		(163,000)
Reductions as a result of completed audit examinations	—		—		(1,554,000)
Reductions as a result of a lapse of the applicable statute of limitations	(309,000)		(600,000)		—
End of year	$	4,864,000	$	6,392,000	$	4,678,000

If recognized, unrecognized tax benefits would affect the effective tax rate.

The Company recognizes interest and penalties related to unrecognized tax benefits through the provision for income taxes. The Company has accrued approximately $577,000, $574,000, and $315,000 for interest as of December 31, 2020, 2019, and 2018, respectively. Interest expensed during 2020, 2019 and 2018 was not considered significant.

The Company is also subject to periodic and routine audits in both domestic and foreign tax jurisdictions, and it is reasonably possible that the amounts of unrecognized tax benefits could change as a result of an audit.

Based on the current audits in process, the payment of taxes as a result of audit settlements, and the completion of tax examinations, the Company does not expect these to have a material impact on the Company’s financial position or results of operations.

For the majority of tax jurisdictions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2016.