Note 10 - Federal and State Income Taxes

12 Months Ended

Dec. 31, 2011

Income Tax Disclosure [Text Block]

10.    Federal and State Income Taxes

Significant components of the Company’s deferred tax assets and liabilities are as follows:

	(in thousands)
	December 31,
	2011			2010
Current deferred tax assets:
Accrued expenses not deductible until paid	$	2,766		$	3,027
Equity Incentive Plan		299			323
Revenue recognition		229			327
Allowance for doubtful accounts		161			170
Other		15			--
Total current deferred tax assets		3,470			3,847
Current deferred tax liabilities:
Prepaid expenses deductible when paid		(5,163	)		(4,941	)
Total current deferred tax liabilities		(5,163	)		(4,941	)
Net current deferred tax liabilities	$	(1,693	)	$	(1,094	)
Noncurrent deferred tax assets:
Interest rate swap	$	--		$	19
Non-compete agreement		63			85
Net operating loss		12,551			7,657
Total noncurrent deferred tax assets		12,614			7,761
Noncurrent deferred tax liabilities:
Tax over book depreciation		(57,612	)		(58,400	)
Capitalized leases		(157	)		(108	)
Other		(38	)		(35	)
Total noncurrent deferred tax liabilities		(57,807	)		(58,543	)
Net noncurrent deferred tax liabilities	$	(45,193	)	$	(50,782	)

For the year ended December 31, 2011, the Company’s effective tax rate increased to 31.5% from 0.2%.  This increase was primarily due to a decrease in our taxable loss, which was offset by our non-deductible items.  The change in the effective tax rate resulted in a decrease of the net deferred tax liability of approximately $5.6 million.

The Company's federal net operating loss carryforwards are available to offset future federal taxable income, if any, through 2031, while its state net operating loss carryforwards and state tax credits generally expire over various periods through 2031 based on jurisdiction.

Significant components of the provision (benefits) for income taxes are as follows:

	(in thousands)
	Year Ended December 31,
	2011			2010		2009
Current:
Federal	$	--		$	--	$	(8,717	)
State		--			--		(1,806	)
Total current		--			--		(10,523	)
Deferred:
Federal		(4,113	)		6		6,851
State		(852	)		1		1,419
Total deferred		(4,965	)		7		8,270
Total income tax (benefit) expense	$	(4,965	)	$	7	$	(2,253	)

A reconciliation between the effective income tax rate and the statutory federal income tax rate is as follows:

	(in thousands)
	Year Ended December 31,
	2011			2010			2009
Income tax (benefit) expense at statutory federal rate	$	(5,352	)	$	(1,122	)	$	(3,206	)
Federal income tax effects of:
State income tax expense		290			--			136
Per diem and other nondeductible meals and entertainment		900			1,024			1,022
Other		49			104			194
Federal income tax (benefit) expense		(4,113	)		6			(1,854	)
State income tax (benefit) expense		(852	)		1			(399	)
Total income tax (benefit) expense	$	(4,965	)	$	7		$	(2,253	)
Effective tax rate		31.5	%		0.2	%		23.9	%

The effective rates varied from the statutory federal tax rate primarily due to state income taxes and certain non-deductible expenses including a per diem pay structure for drivers. Due to the partially nondeductible effect of per diem pay, the Company’s tax rate will fluctuate in future periods based on fluctuations in earnings and in the number of drivers who elect to receive this pay structure.