Note 6 - Income Taxes

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Income Tax Disclosure [Text Block]

6. Income Taxes

Income tax expense attributable to earnings before income taxes consists of (in thousands):

	Years ended December 31,
	2023			2022		2021
Current:
Federal	$	146,595		$	85,855	$	142,542
State and local		44,328			51,078		43,004
		190,923			136,933		185,546
Deferred:
Federal		23,544			172,334		43,900
State and local		(7,867	)		2,755		9,520
		15,677			175,089		53,420
Total tax expense/(benefit)	$	206,600		$	312,022	$	238,966

Income tax expense attributable to earnings before income taxes differed from the amounts computed using the statutory federal income tax rate of 21% as follows (in thousands):

	Years ended December 31,
	2023			2022			2021
Income tax at federal statutory rate	$	196,326		$	269,088		$	209,952
State tax, net of federal effect		28,997			41,624			37,223
Benefit of stock compensation		(7,442	)		(7,584	)		(7,583	)
199/R&D credit, net of FIN 48		(622	)		5,839			(1,524	)
Federal 1341 Claim		(14,616	)		-			-
Nondeductible meals and entertainment		2,331			294			130
Change in effective state tax rate, net of federal benefit		(193	)		1,561			(724	)
Other, net		1,819			1,200			1,492
Total tax expense	$	206,600		$	312,022		$	238,966

Income taxes receivable was $40.7 million and $102.7 million at December 31, 2023 and 2022, respectively. These amounts have been included in other receivables in our Consolidated Balance Sheets. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2023 and 2022, are presented below (in thousands):

	December 31,
	2023			2022
Deferred tax assets:
Insurance accruals	$	104,720		$	54,047
Allowance for doubtful accounts		10,766			10,230
Compensation accrual		8,003			30,492
Deferred compensation accrual		36,309			28,249
Federal benefit of state uncertain tax positions		17,491			16,280
Lease liabilities		82,048			71,732
State NOL carry-forward		5,478			6,765
Other		7,673			7,361
Total gross deferred tax assets		272,488			225,156
Valuation allowance		(5,478	)		(6,765	)
Total deferred tax assets, net of valuation allowance		267,010			218,391
Deferred tax liabilities:
Plant and equipment, principally due to differences in depreciation		1,057,922			1,011,963
Prepaid permits and insurance, principally due to expensing for income tax purposes		63,880			55,132
Lease right-of-use assets		81,416			71,827
Total gross deferred tax liabilities		1,203,218			1,138,922
Net deferred tax liability	$	936,208		$	920,531

Guidance on accounting for uncertainty in income taxes prescribes recognition and measurement criteria and requires that we assess whether the benefits of our tax positions taken are more likely than not of being sustained under tax audits.  We have made adjustments to the balance of unrecognized tax benefits, a component of other long-term liabilities on our Consolidated Balance Sheets, as follows (in millions):

	December 31,
	2023			2022			2021
Beginning balance	$	89.1		$	78.5		$	66.1
Additions based on tax positions related to the current year		16.2			25.8			14.9
Additions/(reductions) based on tax positions taken in prior years		0.5			2.8			4.8
Reductions due to settlements		(14.6	)		(8.0	)		(0.9	)
Reductions due to lapse of applicable statute of limitations		(10.3	)		(10.0	)		(6.4	)
Ending balance	$	80.9		$	89.1		$	78.5

At December 31, 2023 and 2022, we had a total of $80.9 million and $89.1 million, respectively, in gross unrecognized tax benefits.  Of these amounts, $65.6 million and $72.6 million represent the amount of unrecognized tax benefits that, if recognized, would impact our effective tax rate in 2023 and 2022, respectively.  Interest and penalties related to income taxes are classified as interest expense in our Consolidated Statements of Earnings.  The amount of accrued interest and penalties recognized during the years ended December 31, 2023, 2022, and 2021, was $5.3 million, $4.3 million, and $3.5 million, respectively. Future changes to unrecognized tax benefits will be recognized as income tax expense and interest expense, as appropriate.  The total amount of accrued interest and penalties for such unrecognized tax benefits at December 31, 2023 and 2022, was $9.0 million and $7.9 million, respectively. No material change in unrecognized tax benefits is expected in the next 12 months.

Tax years 2017 and forward remain subject to examination by federal tax jurisdictions, while tax years 2013 and forward remain open for state jurisdictions.