
(In thousands)	2020		2019		2018
United States	$	216,234	$	189,834	$	191,095
Foreign	(6,753)		1,580		1,257
Total earnings before income taxes	$	209,481	$	191,414	$	192,352


(In thousands)	2020		2019		2018
Current:
Federal	$	42,541	$	33,655	$	22,297
State and local	9,165		6,764		6,416
Foreign	839		1,070		1,214
Total current provision	52,545		41,489		29,927
Deferred:
Federal	2,342		5,923		12,478
State and local	(671)		(969)		1,639
Foreign	(3,175)		(1,538)		(243)
Total deferred provision	(1,504)		3,416		13,874
Provision for income taxes	$	51,041	$	44,905	$	43,801

The Company has historically reinvested all unremitted earnings of our foreign subsidiaries and affiliates, and therefore has not recognized any U.S. deferred tax liability on those earnings. However, the Tax Cuts and Jobs Act (the "TCJA") change in the U.S. taxation of foreign income has led the Company to reassess its position as it relates to permanent reinvestment and it has now determined that it will only assert permanent reinvestment in its Canadian subsidiaries. The Company examined the potential liabilities related to investments in foreign subsidiaries and concluded that there is no material deferred tax liabilities that should be recorded.

The provision for income taxes differs from the amount computed by applying the federal statutory rate of 21 percent for 2020, 2019, and 2018 to income before income taxes for the following reasons for the years ended December 31:


(In thousands)	2020		2019		2018
Income tax at federal statutory rate	$	43,991	$	40,197	$	40,394
State income tax, net of federal income tax impact	6,710		4,578		6,261
Section 162(m) permanent addback	3,015		587		894

Federal tax credits	(1,307)		(1,435)		(1,876)
Share-based payment compensation excess tax benefit	(190)		(1,579)		(2,914)
Changes in tax law (TCJA)	—		—		612
Other	(1,178)		2,557		430
Provision for income taxes	$	51,041	$	44,905	$	43,801

At December 31, 2020, the Company had domestic federal income taxes payable of $7.2 million, domestic state income taxes payable of $1.9 million, and foreign taxes receivable of $1.8 million recorded. At December 31, 2019, the Company had domestic federal income taxes receivable of $7.1 million, domestic state income taxes receivable of $4.6 million, and foreign taxes payable of $0.5 million recorded.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows at December 31:


(In thousands)	2020		2019
Deferred tax assets:

Stock-based compensation	$	2,084	$	2,290
Pension	8,694		—
Deferred compensation	13,325		5,976
Warranty	10,848		11,246
Inventory	7,443		8,001
Other	6,390		2,585
Lease obligation asset	22,488		25,055
Net operating loss and interest carryforwards	4,857		7,352
Total deferred tax assets before valuation allowance	76,129		62,505
Less: Valuation allowance	(2,809)		(1,662)
Total deferred tax assets net of valuation allowance	73,320		60,843
Deferred tax liabilities:
Lease obligation liability	(21,523)		(24,368)
Fixed assets	(35,637)		(27,898)
Intangible assets	(69,992)		(44,317)
Total deferred tax liabilities	(127,152)		(96,583)

Net deferred tax liabilities	$	(53,832)	$	(35,740)

At December 31, 2020 and 2019, the Company had net foreign deferred tax liabilities of $17.3 million and $9.7 million, respectively, primarily related to intangible assets and foreign pension obligations included in other long-term liabilities on the Consolidated Balance Sheets.

As of December 31, 2020, the Company had deferred tax assets recorded related to foreign net operating losses and tax credit carryforwards of $4.3 million, net. This includes $2.6 million related to U.K. entities and $1.7 million related to Italian entities. The net operating losses and tax credit carryforwards have indefinite lives.

The U.K. valuation allowance for deferred tax assets as of December 31, 2020 and 2019 was $2.6 million and $1.7 million, respectively. These valuation allowances at 2020 and 2019 were related to net operating losses and tax credit

carryforwards related to the U.K. entities. The net change in the total valuation allowance for the year ended December 31, 2020 was an increase of $0.9 million. The increase in the valuation allowance related to the current year losses in the U.K. Based upon historical results and estimated future results, it is the judgment of management that these tax carryforward attributes related to the U.K. entities are not likely to be realized.

As of December 31, 2019, the Company had a domestic deferred tax asset recorded related to interest expense limitation of $4.4 million net, which was fully utilized during 2020.

The Company has concluded it is more likely than not that it will realize the benefit of all other existing deferred tax assets, net of the valuation allowances mentioned above.


(In thousands)	2020		2019		2018
Balance at beginning of period	$	8,214	$	4,325	$	4,145
Changes in tax positions of prior years	—		480		114
Additions based on tax positions related to the current year	1,720		4,288		802

Closure of tax years	(1,013)		(879)		(736)
Balance at end of period	$	8,921	$	8,214	$	4,325

In addition, the total amount of accrued interest and penalties related to taxes, recognized as a liability, was $0.7 million, $0.4 million, and $0.2 million at December 31, 2020, 2019, and 2018, respectively.

The total amount of unrecognized tax benefits, net of federal income tax benefits, of $8.8 million, $7.9 million, and $3.9 million at December 31, 2020, 2019, and 2018, respectively, would, if recognized, increase the Company’s earnings, and lower the Company’s annual effective tax rate in the year of recognition.

The Company is subject to taxation in the United States and various states and foreign jurisdictions. In the normal course of business, the Company is subject to examinations by taxing authorities in these jurisdictions. For U.S. federal and state income tax purposes, tax years 2019, 2018, and 2017 remain subject to examination. The Company is currently under examination by the U.S. Internal Revenue Service for the tax year 2018.

The Company has assessed its risks associated with all tax return positions, and believes its tax reserve estimates reflect its best estimate of the deductions and positions it will be able to sustain, or it may be willing to concede as part of a settlement. At this time, the Company does not anticipate any material change in its tax reserves in the next twelve months. The Company will continue to monitor the progress and conclusion of all audits and will adjust its estimated liability as necessary.