Note 3 - Income Tax

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Income Tax Disclosure [Text Block]

3.

INCOME TAX

Our effective tax rate for the

three

and

nine

-months ended

September 30

is presented below:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Effective tax rate		144.1	%		24.8	%		34.7	%		30.8	%

Our effective tax rate differs from the federal statutory rate primarily due to US state income tax expense, foreign income/loss positions and timing of our deferred tax position, particularly in fixed assets. In addition, to a lesser extent, our effective tax rate is impacted by the new global intangible low-taxed income tax (“GILTI”) for our estimated foreign earnings. GILTI was established as part of the Tax Cuts and Jobs Act (the “Tax Act”), which was enacted on

December 22, 2017.

The Tax Act also reduced the federal statutory rate from

35%

in

2017

to

21%

in

2018.

During the

three

months ended

September 30, 2018,

we completed our accounting for the income tax effects of the Tax Act and recorded approximately

$250,000

of additional transitional tax as certain of our international net operating losses were subjected to federal limitation rules.  In addition, during the quarter ended

September 30, 2018,

certain of our international locations incurred operating losses for which

no

tax benefit was recorded.  As a result, this additional transition tax and our position on foreign losses unfavorably impacted the effective tax rates compared to the prior year periods. 

For the

nine

months ended

September 30, 2018,

we did

not

record any GILTI tax expense or benefit related to our estimated foreign earnings (losses), as our foreign locations are currently in a net loss position.  This GILTI tax was created as part of the Tax Act.  Accordingly, there was

no

such provision during the same period in

2017.