INCOME TAXES	9 Months Ended
Sep. 30, 2020
INCOME TAXES
INCOME TAXES	NOTE 8 – INCOME TAXES During the three months ended September 30, 2020 and 2019, the Company’s effective tax rate was 22.5% and 23.5%, respectively. During the nine months ended September 30, 2020 and 2019, the Company’s effective tax rate was 14.0% and 72.3%, respectively. The Company’s effective tax rate, when compared to the federal statutory rate of 21%, is primarily affected by state income taxes, net of federal income tax effect for the current year periods, and permanent differences, the most significant of which is the effect of the partially non-deductible per diem pay structure for our drivers. Drivers may elect to receive non-taxable per diem pay in lieu of a portion of their taxable wages. This per diem program increases the Company’s drivers’ net pay per mile, after taxes, while decreasing their gross pay, before taxes. Per diem pay is partially non-deductible by the Company under current IRS regulations. As a result, salaries, wages and employee benefits costs are slightly lower and effective income tax rates are higher than the statutory rate. Due to the partially non-deductible effect of per diem pay, the Company’s tax rate will change based on fluctuations in earnings (losses) and in the number of drivers who elect to receive this pay structure. Generally, as pretax income or loss increases, the impact of the driver per diem program on the Company’s effective tax rate decreases, because aggregate per diem pay becomes smaller in relation to pretax income or loss, while in periods where earnings are at or near breakeven the impact of the per diem program on the Company’s effective tax rate can be significant. During the nine month period ended September 30, 2020 our effective tax rate was also affected by changes stemming from the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) enacted in 2020, which allows a five year federal net operating loss carryback for federal income tax purposes to tax periods where the federal statutory rate was 35%, resulting in a tax benefit. The Company has historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pretax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. We determined that since small changes in estimated “ordinary” income would result in significant changes in the estimated annual effective tax rate, the historical method would not provide a reliable estimate. As such, we have used a cut-off method to calculate taxes for the three and nine months ended September 30, 2020.

INCOME TAXES

9 Months Ended

Sep. 30, 2020

NOTE 8 – INCOME TAXES

During the three months ended September 30, 2020 and 2019, the Company’s effective tax rate was 22.5% and 23.5%, respectively. During the nine months ended September 30, 2020 and 2019, the Company’s effective tax rate was 14.0% and 72.3%, respectively. The Company’s effective tax rate, when compared to the federal statutory rate of 21%, is primarily affected by state income taxes, net of federal income tax effect for the current year periods, and permanent differences, the most significant of which is the effect of the partially non-deductible per diem pay structure for our drivers. Drivers may elect to receive non-taxable per diem pay in lieu of a portion of their taxable wages. This per diem program increases the Company’s drivers’ net pay per mile, after taxes, while decreasing their gross pay, before taxes. Per diem pay is partially non-deductible by the Company under current IRS regulations. As a result, salaries, wages and employee benefits costs are slightly lower and effective income tax rates are higher than the statutory rate. Due to the partially non-deductible effect of per diem pay, the Company’s tax rate will change based on fluctuations in earnings (losses) and in the number of drivers who elect to receive this pay structure. Generally, as pretax income or loss increases, the impact of the driver per diem program on the Company’s effective tax rate decreases, because aggregate per diem pay becomes smaller in relation to pretax income or loss, while in periods where earnings are at or near breakeven the impact of the per diem program on the Company’s effective tax rate can be significant.

During the nine month period ended September 30, 2020 our effective tax rate was also affected by changes stemming from the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) enacted in 2020, which allows a five year federal net operating loss carryback for federal income tax purposes to tax periods where the federal statutory rate was 35%, resulting in a tax benefit.

The Company has historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pretax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. We determined that since small changes in estimated “ordinary” income would result in significant changes in the estimated annual effective tax rate, the historical method would not provide a reliable estimate. As such, we have used a cut-off method to calculate taxes for the three and nine months ended September 30, 2020.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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