Income Taxes

12 Months Ended

Dec. 31, 2021

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 2016.

We file consolidated federal income tax returns that include all of our U.S. subsidiaries. The components of the provision for income taxes from continuing operations for the years ended December 31, 2021, 2020 and 2019 are as follows (in thousands):

	2021		2020		2019
Current:
Federal	$	3,919	$	4,086	$	7,739
State	856		1,262		1,344
Foreign	1,066		144		825
	5,841		5,492		9,908
Deferred:
Federal	(3,318)		(78)		(66)
State	(1,038)		163		(490)
Foreign	—		21		51
	(4,356)		106		(505)
Provision for income taxes	$	1,485	$	5,598	$	9,403

The differences between the amount of tax computed at the federal statutory rate of 21% in 2021, 2020 and 2019, and the provision for income taxes from continuing operations for the years ended December 31, 2021, 2020 and 2019 are as follows (in thousands):

	2021		2020		2019
Tax at statutory federal income tax rate	$	1,985	$	89	$	9,749
Increases (decreases) in tax resulting from:
State taxes, net of federal tax benefit	383		(52)		1,805
Permanent differences, net	(839)		(1,406)		(195)
Tax credits	(434)		(195)		(612)
Prior year true-up adjustment	83		397		(1,274)
Valuation allowance	331		6,716		(137)
Other provision adjustments	(24)		49		67
Provision for income taxes	$	1,485	$	5,598	$	9,403

Certain amounts from 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, 2021 and 2020 are as follows (in thousands):

	2021		2020
Gross deferred tax assets
Deferred compensation and accrued paid leave	$	5,422	$	6,302
Inventory reserve	12,465		432
Operating lease liabilities	7,805		6,984
Stock-based compensation	775		605
Interest rate swaps	58		400
Reserve for contract disallowance	114		195
Capitalized inventory	900		573
US operating and capital loss carryforward	6,045		5,989
Tax credit carryforward	1,411		1,412
Foreign country operating loss carryforward	892		583
	35,887		23,475
Valuation allowance(a)	(8,257)		(7,926)
Total gross deferred tax assets	27,630		15,549
Gross deferred tax liabilities
Depreciation	(3,895)		(3,061)
Deferred revenues	(1,358)		(1,816)
Goodwill and intangible assets	(24,836)		(19,470)
Operating lease right-of-use assets	(6,375)		(5,384)
Other	(274)		(715)
Total gross deferred tax liabilities	(36,738)		(30,446)
Net deferred tax liabilities	$	(9,108)	$	(14,897)

(a) A valuation allowance was provided against US capital loss in connection with the stock sale of Prime Turbines, certain state net operating loss, 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 2017.

As of December 31, 2021, 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 2034; however, some may be carried forward indefinitely.