
	Years Ended December 31,
	2020		2019		2018
Current:
Federal	$	—	$	(1.4)	$	2.2
Foreign	1.8		3.5		1.9
State and local	6.1		3.7		5.5
Total current	7.9		5.8		9.6
Deferred:
Federal	22.5		15.9		(7.0)
Foreign	(7.1)		0.4		(1.9)
State and local	(2.9)		(6.0)		(1.0)
Total deferred	12.5		10.3		(9.9)
Total income tax provision (benefit)	$	20.4	$	16.1	$	(0.3)


	December 31, 2020		December 31, 2019
Deferred tax assets:
Employee benefit plans	$	5.3	$	5.5
Tax credit carryforwards	0.5		2.1
Right-of-use assets	48.5		54.7
Accrued expenses	37.0		35.0
Net operating loss carryforwards	75.1		122.9
Total deferred tax assets	166.4		220.2
Less: valuation allowance	(3.2)		(9.0)
Total net deferred tax assets	163.2		211.2
Deferred tax liabilities:
Lease liabilities	(46.4)		(53.2)
Outside basis difference in foreign subsidiaries and other	(1.8)		(2.0)
Depreciation on tangible assets	(517.4)		(545.7)
Intangible assets	(71.6)		(69.6)
Total deferred tax liabilities	(637.2)		(670.5)
Net deferred tax liability	$	(474.0)	$	(459.3)

As of December 31, 2020, a deferred tax asset of $61.8 million was recorded for unutilized federal net operating loss carryforwards ("NOL carryforwards"). The total federal NOL carryforwards are $302.6 million and have an indefinite carryforward period. State NOL carryforwards have generated a deferred tax asset of $10.6 million and expire over various years beginning in 2021.

As of December 31, 2020, deferred tax assets of $0.5 million were recorded for federal and various state tax credit carryforwards. As of December 31, 2020, deferred tax assets of $2.5 million were recorded for foreign NOL carryforwards of $15.5 million, all of which have an indefinite carryforward period.

In determining the valuation allowance, an assessment of positive and negative evidence was performed regarding realization of the net deferred tax assets in accordance with Topic 740. This assessment included the evaluation of scheduled reversals of deferred tax liabilities, the availability of carryforwards and estimates of projected future taxable income. Based on the assessment, as of December 31, 2020, total valuation allowances of $3.2 million were recorded against deferred tax assets. Although realization is not assured, the Company has concluded that it is more likely than not the remaining deferred tax assets of $163.2 million will be realized and as such no valuation allowance has been provided on these assets.

The income tax in the accompanying consolidated statements of operations differs from the income tax calculated by applying the statutory federal income tax rate to income (loss) before income taxes due to the following (in millions):


	Years Ended December 31,
	2020		2019		2018
Income tax (benefit) provision at statutory rate	$	19.8	$	13.3	$	14.4

Increases (decreases) resulting from:
Foreign taxes	(0.1)		0.9		0.9
State and local income taxes, net of federal income tax	3.1		(3.7)		3.6
Federal and foreign	3.5		3.1		1.1
Enactment of the 2017 Tax Act(a)	—		—		(20.8)
Change in valuation allowance	(5.8)		2.6		(1.5)
Outside basis difference in foreign subsidiaries	—		(0.9)		0.9
All other items, net	(0.1)		0.8		1.1
Income tax (benefit) provision	$	20.4	$	16.1	$	(0.3)

(a) In December 2017, the 2017 Tax Act was enacted and during the year ended December 31, 2018, the Company finalized its estimates and recorded a net benefit of $20.8 million comprised of (i) a $14.3 million expense related to the revaluation of the Company's net deferred tax liability based on a U.S. federal tax rate of 21% and (ii) a $35.1 million benefit related to the one-time transition tax on previously unrepatriated earnings from foreign operations.

As a result of the 2017 Tax Act, previously undistributed earnings from foreign subsidiaries are deemed to have been repatriated as of December 31, 2017 for federal income tax purposes. Beginning in 2018, companies are generally able to repatriate earnings from foreign subsidiaries with no U.S. federal income tax impact. As of December 31, 2020, the Company continues to assert that earnings from foreign operations are not permanently invested. The Company, as a matter of policy, looks to repatriate foreign earnings in a tax efficient manner. Many foreign jurisdictions impose taxes on distributions to other jurisdictions. Due to the variations and complexities of these laws, the Company believes it would be impractical to calculate and accrue these taxes beyond the normal earnings and profits standard for U.S. tax purposes.

As of December 31, 2020, the Company is maintaining the assertion that future earnings associated with the potential stock sale or liquidation of foreign subsidiaries are permanently reinvested. Accordingly, the Company has not recorded any deferred tax liabilities associated with these book-to-tax differences. The Company has analyzed the potential tax liability associated with these differences to be approximately $46.6 million.

The Company conducts business globally and, as a result, files one or more income tax returns in the U.S. and non-U.S. jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world. The open tax years for these jurisdictions span from 2005 to 2018. The IRS completed its audit of the Company's 2007 to 2011 consolidated income tax returns, in which Herc was included, and had no changes to the previously filed tax returns. The Company is currently under audit for the 2014 through 2016 income tax years. Several U.S. state and non-U.S. jurisdictions are under audit. The Company does not expect any material assessments resulting from these audits.

In February 2018, the FASB issued guidance that allows reclassification from accumulated other comprehensive income to retained earnings for certain tax effects resulting from the 2017 Tax Act that would otherwise be stranded in accumulated other comprehensive income. This guidance is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. The Company has elected to early adopt this guidance and as a result has recorded an adjustment of $2.2 million to accumulated deficit as of January 1, 2018.