Income Taxes

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

We are subject to U.S. federal income tax as well as income tax in multiple state and local jurisdictions. We have concluded all U.S. federal income tax matters as well as material state and local tax matters for years through 2015.

We file consolidated federal income tax returns that include all of our subsidiaries. The components of the provision for income taxes from continuing operations for the years ended December 31, 2020, 2019 and 2018 are as follows (in thousands):

	2020		2019		2018
Current
Federal	$	4,086	$	7,739	$	9,667
State	1,262		1,344		1,758
Foreign	144		825		140
	5,492		9,908		11,565
Deferred
Federal	(78)		(66)		(1,114)
State	163		(490)		(347)
Foreign	21		51		64
	106		(505)		(1,397)
Provision for income taxes	$	5,598	$	9,403	$	10,168

The differences between the amount of tax computed at the federal statutory rate of 21% in 2020, 2019 and 2018, and the provision for income taxes from continuing operations for the years ended December 31, 2020, 2019 and 2018 are as follows (in thousands):

	2020		2019		2018
Tax at statutory federal income tax rate	$	89	$	9,749	$	9,502
Increases (decreases) in tax resulting from:
State taxes, net of federal tax benefit	(52)		1,805		1,861
Permanent differences, net	(1,406)		(195)		367
Impact of Tax Act	—		—		(795)
Tax credits	(195)		(612)		(375)
Prior year true-up adjustment	397		(1,274)		(113)
Valuation allowance	6,716		(137)		107
Other provision adjustments	49		67		(386)
Provision for income taxes	$	5,598	$	9,403	$	10,168

Certain amounts from the prior years have been reclassified to conform to the current year presentation.

The tax effect of temporary differences representing deferred tax assets and liabilities as of December 31, 2020 and 2019 are as follows (in thousands):

	2020		2019
Gross deferred tax assets
Deferred compensation and accrued paid leave	$	6,302	$	7,498
Operating lease liabilities	6,984		7,009
Stock-based compensation	605		678
Interest rate swaps	400		367
Reserve for contract disallowance	195		145
Capitalized inventory	573		—
US operating and capital loss carryforward	5,989		24
Tax credit carryforward	1,412		1,547
Foreign country operating loss carryforward	583		—
	23,043		17,268
Valuation allowance (a)	(7,926)		(1,165)
Total gross deferred tax assets	15,117		16,103
Gross deferred tax liabilities
Depreciation	(3,061)		(2,498)
Deferred revenues	(1,816)		(1,681)
Goodwill and intangible assets	(19,470)		(23,383)
Operating lease right-of-use assets	(5,384)		(5,323)
Capitalized inventory	—		(240)
Other	(283)		(823)
Total gross deferred tax liabilities	(30,014)		(33,948)
Net deferred tax liabilities	$	(14,897)	$	(17,845)

(a) A valuation allowance was provided against US capital loss in connection with the stock sale of Prime Turbines, certain state tax credit and foreign tax loss deferred tax assets arising from carryforwards of unused tax benefits.

(b) Certain amounts from prior year have been reclassified to conform with current year presentation.

We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. With few exceptions, the statute of limitations for these jurisdictions is no longer open for audit or examinations for the years before 2016.

At December 31, 2020, we have various tax losses and tax credits that may be applied against future taxable income. The majority of such tax attributes will expire in 2026 through 2030; however, some may be carried forward indefinitely.

In March 2020, the Coronavirus Aid, Relief and Economic Security Act (CARES Act) was enacted. The CARES Act includes certain changes to U.S. tax law, which we do not believe had a significant impact on our 2020 effective tax rate.