Note 3 - Income Taxes

3 Months Ended

Mar. 31, 2020

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note 3.   Income Taxes

Major components of our income tax benefit for the three months ended March 31, 2020 and 2019 are as follows (in thousands):

	Three Months Ended
	March 31,
	2020			2019
Current:
Domestic	$	(732	)	$	—
Foreign		(2,069	)		(1,077	)
Total current income tax provision		(2,801	)		(1,077	)
Deferred:
Domestic		1,250			2,477
Foreign		2,613			5,816
Total deferred income tax benefit		3,863			8,293
Total income tax benefit	$	1,062		$	7,216

The income tax benefit for the three months ended March 31, 2020 and 2019 varies from the amounts that would have resulted from applying the statutory income tax rate to pre-tax income due primarily to the impact of taxation in foreign jurisdictions and a valuation allowance on the majority of U.S. deferred tax assets.

In 2018, we acquired through the acquisition of Klondex Mines Ltd. a U.S. consolidated tax group ("Nevada U.S. Group") that did not join the existing consolidated U.S. tax group of Hecla Mining Company and subsidiaries (“Hecla U.S.”).  For Hecla U.S., we recorded a full valuation allowance in the U.S. in December 2017 as a result of U.S. tax reform.  Our circumstances at March 31, 2020 continued to support a full valuation allowance in the U.S. for Hecla U.S.

As of March 31, 2020, we have a net deferred tax liability in the Nevada U.S. Group of $37.0 million, a net deferred tax liability in Canada of $89.2 million and a net deferred tax asset in Mexico of $3.0 million, for a consolidated worldwide net deferred tax liability of $123.2 million.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law.  The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property.  The CARES Act has not had a material impact on the Company as of March 31, 2020; however we will continue to examine the impacts the CARES Act may have on our business.