

	Years Ended December 31,
	2020		2019		2018
	(in thousands)
Current
Federal	$	(3,632)	$	324	$	734
State		190		479		638
International		31		144		23
Total Current		(3,411)		947		1,395
Deferred
Federal		1,522		(1,296)		2,839
State		377		(261)		844
International		(17)		(64)		80
Total Deferred		1,882		(1,621)		3,763
Total (Benefit) Provision for Income Taxes	$	(1,529)	$	(674)	$	5,158

On March 27, 2020, the CARES Act was signed into law. The CARES Act includes a wide variety of tax and non-tax provisions aimed to provide relief to individuals and businesses adversely affected by the COVID-19 pandemic, including an array of tax benefits and incentives for businesses, including the deferral of certain employer payroll taxes. Additionally, the CARES Act modified the rules associated with net operating losses and made technical corrections to tax depreciation methods for qualified improvement property. As a result of the CARES Act tax law changes, for the year ended December 31, 2020, we recognized a $3.4 million tax benefit related to our ability to carryback net operating losses to prior years that had higher tax rates. The carryback claims of the 2019 U.S. federal income tax return are currently filed with the IRS, and the anticipated refund is $8.9 million. Additionally, starting in the second quarter of 2020 and continuing through the year ended December 31, 2020, the Company deferred payments associated with employer related payroll taxes of approximately $2.7 million under the CARES Act with expected payments in late 2021 and 2022.

The following table reflects the effective income tax rate reconciliation for the years ended December 31, 2020, 2019 and 2018:



	2020		2019		2018
Federal statutory rate	21.0	%	21.0	%	21.0	%
Tax reform	-		-		(1.1)
State income taxes, net of the federal tax benefit	7.6		3.7		5.7
Stock based compensation	12.6		(7.3)		7.6
Remeasurement of deferred tax assets	(0.1)		(1.1)		0.3
Tax credits	(0.9)		2.6		(0.8)
Uncollectible state receivables	-		(5.6)		-
Impact of CARES Act	(76.1)		-		-
Other	1.9		(0.2)		0.4
Effective tax rate	(34.0)	%	13.1	%	33.1	%

The Company’s effective tax rate was (34.0%) in 2020 and 13.1% in 2019. The tax benefit recognized during 2020 and the improvement in the effective tax rate was primarily due to the enactment of the CARES Act, which gave the Company the ability to carry back federal net operating losses to years with a federal statutory tax rate of 35%.

The Company’s effective tax rate for 2019 was 13.1%, compared to 33.1% in 2018, a decrease of 20.0%. Income tax expense in 2018 included stock based compensation charges, which increased the Company’s effective tax rate by 7.6%. Income tax benefit in 2019 included tax shortfall charges and the write-off of uncollectible state receivables, which decreased the Company’s effective tax rate by 12.9%.
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	2020		2019
	(in thousands)
Deferred income tax assets:
Section 743 carryforward	$	11,215	$	12,915
Inventory		1,324		1,829
Stock based compensation		1,019		1,290
Operating lease liabilities⁽¹⁾		38,981		41,203
Net operating loss & credit carryforwards		362		3,495
Other		3,520		2,120
Total deferred income tax assets	$	56,421	$	62,852

Deferred income tax liabilities
Depreciation		12,642		15,279
Operating lease right-of-use assets⁽¹⁾		36,516		37,910
Other		1,922		2,467
Total deferred income tax liabilities		51,080		55,656
Net deferred income tax assets	$	5,341	$	7,196

(1)See Note 1: Summary of Significant Accounting Policies, regarding the impact of the adoption of ASC Topic 842: Leases

As of December 31, 2020, the Company had $0.4 million of state tax effected net operating losses, with all amounts before limitation impacts and valuation allowances. The state tax attribute carryovers will expire after five years to indefinite carryover period.

The Company has recognized the tax consequences of all foreign unremitted earnings and management has no specific plans to indefinitely reinvest the unremitted earnings of its foreign subsidiary as of December 31, 2020. As of December 31, 2020, the total undistributed earnings of the Company's non-U.S. subsidiary was approximately $0.6 million. The Company has provided no deferred taxes on withholding taxes, state taxes, and foreign currency gains and losses due on the repatriation of those earnings.

The Company records interest and penalties through income tax relating to uncertain tax positions. As of December 31, 2020, 2019 and 2018, the Company has not recognized any liabilities for uncertain tax positions nor has the Company accrued interest and penalties related to uncertain tax positions.

The Company's federal income tax returns for fiscal years 2017 through 2019 tax years are still subject to examination in the U.S. Various state and foreign jurisdiction tax years remain open to examination. The Company believes that any potential assessment would be immaterial to its consolidated financial statements.