Income Taxes |
6. INCOME TAXES
The components of income tax expense (benefit) are as follows: | | | | | | | | | | | | | | | | Year Ended December 31, | thousands | | 2017 | | 2016 | | 2015 | Current income tax expense (benefit) | | | | | | | Federal income tax expense (benefit) | | $ | — |
| | $ | 4,477 |
| | $ | 32,422 |
| State income tax expense (benefit) | | 2,408 |
| | 1,340 |
| | 1,764 |
| Total current income tax expense (benefit) | | 2,408 |
| | 5,817 |
| | 34,186 |
| Deferred income tax expense (benefit) | | | | | | | Federal income tax expense (benefit) | | — |
| | 1,622 |
| | 10,251 |
| State income tax expense (benefit) | | 2,458 |
| | 933 |
| | 1,095 |
| Total deferred income tax expense (benefit) | | 2,458 |
| | 2,555 |
| | 11,346 |
| Total income tax expense (benefit) | | $ | 4,866 |
| | $ | 8,372 |
| | $ | 45,532 |
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Total income taxes differed from the amounts computed by applying the statutory income tax rate to income (loss) before income taxes. The sources of these differences are as follows: | | | | | | | | | | | | | | | | Year Ended December 31, | thousands except percentages | | 2017 | | 2016 | | 2015 | Income (loss) before income taxes | | $ | 578,068 |
| | $ | 605,352 |
| | $ | 56,630 |
| Statutory tax rate | | — | % | | — | % | | — | % | Tax computed at statutory rate | | $ | — |
| | $ | — |
| | $ | — |
| Adjustments resulting from: | | | | | | | Federal taxes on income attributable to Anadarko’s investment in WES | | — |
| | 6,162 |
| | 42,823 |
| State taxes on income attributable to Anadarko’s investment in WES (net of federal benefit) | | — |
| | 117 |
| | 298 |
| Texas margin tax expense (benefit) (1) | | 4,866 |
| | 2,093 |
| | 2,411 |
| Income tax expense (benefit) | | $ | 4,866 |
| | $ | 8,372 |
| | $ | 45,532 |
| Effective tax rate | | 1 | % | | 1 | % | | 80 | % |
| | (1) | Includes a reduction of $2.2 million in deferred state income taxes for the year ended December 31, 2015. Texas House Bill 32, signed into law in June 2015, reduced the Texas margin tax rates by 0.25%. The law became effective January 1, 2016. WGP is required to include the impact of the law change on its deferred state income taxes in the period enacted. |
The tax effects of temporary differences that give rise to significant portions of deferred tax assets (liabilities) are as follows: | | | | | | | | | | | | December 31, | thousands | | 2017 | | 2016 | Depreciable property | | $ | (7,676 | ) | | $ | (4,976 | ) | Credit carryforwards | | 448 |
| | 498 |
| Other intangible assets | | (189 | ) | | (1,928 | ) | Other | | 8 |
| | 4 |
| Net long-term deferred income tax liabilities | | $ | (7,409 | ) | | $ | (6,402 | ) |
Credit carryforwards, which are available for use on future income tax returns, consist of $0.4 million of state income tax credits that expire in 2026.
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