Note 3 - Income Taxes

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note

3.

   Income Taxes

Major components of our income tax provision (benefit) for the

three

and

six

months ended

June 30, 2018

and

2017

are as follows (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Current:
Domestic	$	1		$	—		$	1		$	(12,798	)
Foreign		2,965			15,935			4,171			21,451
Total current income tax provision (benefit)		2,966			15,935			4,172			8,653
Deferred:
Domestic		—			2,965			—			(15,939	)
Foreign		(2,539	)		(2,805	)		(2,977	)		(5,690	)
Total deferred income tax provision (benefit)		(2,539	)		160			(2,977	)		(21,629	)
Total income tax provision (benefit)	$	427		$	16,095		$	1,195		$	(12,976	)

The current income tax provisions for the

three

and

six

months ended

June 

30,

2018

and

2017

vary from the amounts that would have resulted from applying the statutory income tax rate to pre-tax income due primarily to the full valuation allowance in the U.S. in

2018,

the impact of taxation in foreign jurisdictions and the impact of the change in accounting method treatment of the

#4

Shaft development costs in

2017.

As of

June 

30,

2018,

we have a net deferred tax liability in the U.S. of

$0.3

million, a net deferred tax liability in Canada of

$112.5

million, and a net deferred tax asset in Mexico of

$1.5

million, for a consolidated worldwide net deferred tax liability of

$111.3

million. We recorded a full valuation allowance in the U.S. in

December 2017

as a result of U.S. tax reform. Our circumstances at

June 

30,

2018

continue to support a full valuation allowance in the U.S. where our domestic tax provision is zero. In the

first

quarter of

2017,

we received consent from the Internal Revenue Service to permit us to take a different income tax position relating to the timing of deductions for the

#4

Shaft development costs at Lucky Friday. This tax accounting method change substantially revised the timing of deductions for these costs for regular tax and Alternative Minimum Tax ("AMT") relative to our projected life of mine and projected taxable income. These timing changes caused us to revise our assessment of the ability to generate sufficient future taxable income to realize our deferred tax assets, resulting in a valuation allowance release of approximately

$15

million. At

June 

30,

2018

and

December 

31,

2017,

the balance of the valuation allowances on our deferred tax assets was

$79.4

million and

$78.7

million, respectively.