Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

8. Income Taxes.

The Provision for income tax expense included in the financial statements (in thousands):

	Years Ended December 31,
	2021			2020			2019
Included in Net income:
Continuing operations	$	10,281			3,207			2,962
Discontinued operations		—			—			2,542
		10,281			3,207			5,504
Comprehensive income		(209	)		(92	)		602
Total tax expense	$	10,072			3,115			6,106

The Provision for income taxes (income tax benefit) consists of the following (in thousands):

	Year Ended December 31,
	2021		2020			2019
Current:
Federal	$	305		(2,667	)		(8,225	)
State		1,826		(213	)		(7,799	)
		2,131		(2,880	)		(16,024	)
Deferred		7,941		5,995			22,130
Total	$	10,072		3,115			6,106

The deferred taxes in 2020 are primarily related to the bonus depreciation on property placed in service. Taxes in 2020 were favorably impacted by $1,100,000 due to a carryback of our 2020 tax net operating loss to fiscal 2016 when the federal tax rate was 35%. Current income tax expense in 2019 includes a $13,797,000 provision to return adjustment related to the deferral of current federal and state taxes due in connection with $50 million additional Opportunity Zone investment funds invested in June of 2019 but applied to the 2018 returns. In addition, 2019 includes an additional deferral reduction of $4,213,000 of current state taxes related to the $55 million Opportunity Zone investment in December of 2018 which were deferred rather than our prior 2018 tax position that the state taxes would not conform to the federal treatment. The aggregate of the provision to return adjustments in 2019 of $18 million offset current tax provision of $2 million absent these adjustments for a net current tax benefit of $16 million.

As of December 31, 2021 the company has deferred taxes of approximately $31 million associated with $112 million of gains on sales reinvested through Opportunity Zone investments. These taxes are deferred until the earlier of the sale of the related investments or December 31, 2026 and 10% of gains are excluded from tax once the investments are held five years plus an additional 5% is excluded at seven years.

A Reconciliation between the amount of tax shown above and the amount computed at the statutory Federal income tax rate follows (in thousands):

	Year Ended December 31
	2021			2020			2019
Amount computed at statutory
Federal rate	$	7,941			3,226			5,006
State income taxes (net of Federal   income tax benefit)		2,634			1,048			1,623
Carryback of net operating loss		—			(1,100	)		—
Other, net		(503	)		(59	)		(523	)
Provision for income taxes	$	10,072			3,115			6,106

In this reconciliation, the category “Other, net” consists of permanent tax differences related to non-deductible expenses, special tax rates and tax credits, interest paid and penalties, and adjustments to prior year estimates.

The types of temporary differences and their related tax effects that give rise to Deferred tax assets and deferred tax liabilities are presented below (in thousands):

	December 31,
	2021		2020		2019
Deferred tax liabilities:
Property and equipment	$	38,143		56,314		49,932
Investment in opportunity zone		30,846		—		—
Depletion		704		708		718

Unrealized rents		58	27	27
Prepaid expenses		36	50	76
Gross deferred tax liabilities		69,787	57,099	50,753
Deferred tax assets:
Federal tax loss carryforwards		3,235	—	—
State tax loss carryforwards		1,388	—	—
Employee benefits and other		1,117	993	642
Gross deferred tax assets		5,740	993	642
Net deferred tax liability	$	64,047	56,106	50,111

	Years Ended
Other Items - All Gross		12/31/2021	12/31/2020
State NOL Carryovers		23,111,156	3,863,571
Federal NOL Carryovers		15,406,397	—

The Company has no unrecognized tax benefits.

FRP tax returns in the U.S. and various states that include the Company are subject to audit by taxing authorities. As of December 31, 2021, the earliest tax year that remains open for audit is 2016. Our effective income tax expense may vary, possibly materially, due to projected effective state tax rates.