XML 27 R17.htm IDEA: XBRL DOCUMENT v3.22.2.2
Note 10 - Income Tax Provision
9 Months Ended
Sep. 30, 2022
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

10)

INCOME TAX PROVISION

 

The following table summarizes the income tax provision.  

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  2022  

2021

  2022  

2021

 

Income tax expense (benefit)

 $1,697  $(3,181

)

 $55  $(12,037

)

Effective tax rate

  9.7%  (52.8

%)

  16.5%  (148.1

%)

 

The Company’s effective tax rate for the nine months ended September 30, 2022 reflects the favorable impact of the BTC. This was partly offset by the derecognition of accumulated tax benefits inherent in carryforwards of certain tax attributes, as discussed below.

 

The Company evaluates its deferred tax assets quarterly and records a valuation allowance to reduce these assets to the amount that is more likely than not to be realized. During the first quarter of 2022, based on all available evidence, the Company determined that portions of its deferred tax assets for carryforwards of federal and state net operating losses, tax credits, and capital losses, do not meet the realizability standard of more likely than not.  This assessment was modified in the second quarter, when a reduction in the forecasted annual tax loss facilitated the release of some of the valuation allowance established in the first quarter.

 

In the three and nine months ended September 30, 2021, because the Company was unable to reliably estimate its annual effective tax rate, the tax benefit was determined by applying an actual year-to-date effective rate to year-to-date pretax income.  The effective tax rate for the three and nine months ended September 30, 2021 reflected the positive effects of certain tax credits and incentives, the most significant of which are the BTC and Small Agri-biodiesel Producer Tax Credit.