Note 3 - Income Taxes

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note 3.   Income Taxes

Major components of our income tax benefit (provision) for the three and nine months ended September 30, 2020 and 2019 are as follows (in thousands):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2020			2019			2020			2019
Current:
Domestic	$	(705	)	$	(315	)	$	(1,690	)	$	(317	)
Foreign		(2,286	)		(2,467	)		(6,005	)		(5,260	)
Total current income tax (provision) benefit		(2,991	)		(2,782	)		(7,695	)		(5,577	)
Deferred:
Domestic		192			2,652			3,307			10,585
Foreign		1,166			1,744			3,191			15,001
Total deferred income tax benefit (provision)		1,358			4,396			6,498			25,586
Total income tax (provision) benefit	$	(1,633	)	$	1,614		$	(1,197	)	$	20,009

The current income tax (provisions) benefits for the three and nine months ended September 30, 2020 and 2019 vary 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 September 30, 2020 continued to support a full valuation allowance in the U.S. for the Hecla U.S. group.

As of September 30, 2020, we had a net deferred tax liability in the U.S. of $34.9 million, a net deferred tax liability in Canada of $94.6 million, and a net deferred tax asset in Mexico of $3.4 million, for a consolidated worldwide net deferred tax liability of $126.1 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 September 30, 2020; however, we will continue to examine the impacts the CARES Act may have on our business.