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Income Taxes
12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES
The provision for income taxes consisted of the following (in thousands):
 
 
Year ended December 31,
 
 
2019
 
2018
 
2017
Current:
 
 
 
 
 
 
  Federal
 
$
47,886

 
$
39,053

 
$
55,218

  State
 
7,169

 
5,483

 
4,970

Current tax provision
 
55,055

 
44,536

 
60,188

Deferred:
 
 
 
 
 
 
  Federal
 
(1,637
)
 
(663
)
 
(1,918
)
  State
 
(194
)
 
(61
)
 
(174
)
Deferred tax provision (benefit)
 
(1,831
)
 
(724
)
 
(2,092
)
Total income tax provision
 
$
53,224

 
$
43,812

 
$
58,096


 Income taxes paid were $38.0 million, $83.3 million and $16.8 million for the years ended December 31, 2019, 2018 and 2017, respectively.
A reconciliation of the provision for income taxes and the amount computed by applying the statutory federal income tax rate to income before provision for income taxes for the years ended December 31, 2019, 2018 and 2017 (in thousands):
 
 
Year Ended December 31,
 
 
2019
 
2018
 
2017
Tax at federal statutory rate (1)
 
$
48,685

 
21.0
 %
 
$
41,816

 
21.0
 %
 
$
60,008

 
35.0
 %
State income taxes (net of federal benefit)
 
5,497

 
2.4

 
4,263

 
2.1

 
3,060

 
1.8

Domestic production activity deduction
 

 

 

 

 
(5,461
)
 
(3.2
)
Stock-based compensation
 
(1,749
)
 
(0.8
)
 
(3,107
)
 
(1.5
)
 
(1,039
)
 
(0.6
)
Non deductible expenses and other
 
771

 
0.4

 
850

 
0.4

 
382

 
0.2

Change in tax rates - deferred taxes
 
20

 

 
(10
)
 

 
1,146

 
0.7

Tax at effective rate
 
$
53,224

 
23.0
 %
 
$
43,812

 
22.0
 %
 
$
58,096

 
33.9
 %

(1) The Tax Act (as defined below) reduced the U.S. federal statutory rate from 35% to 21% beginning in 2018.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
The components of net deferred tax assets and liabilities at December 31, 2019 and 2018 are as follows (in thousands):
 
 
December 31
 
 
2019
 
2018
Deferred tax assets:
 
 
 
 
   Accruals and reserves
 
$
3,035

 
$
2,642

   Lease
 
1,026

 

   Inventory
 
692

 
755

   Stock-based compensation
 
2,892

 
1,918

   Debt Extinguishment
 
134

 
531

   Other
 
79

 
297

Total deferred tax assets
 
7,858

 
6,143

Deferred tax liabilities:
 
 
 
 
   Discount on Convertible Notes
 

 
(307
)
   Prepaids
 
(1,382
)
 
(2,370
)
   Lease
 
(1,219
)
 

   Tax depreciation in excess of book depreciation
 
(19
)
 
(183
)
   Goodwill and other assets amortized for tax
 
(617
)
 
(493
)
Total deferred tax liabilities
 
(3,237
)
 
(3,353
)
Total net deferred tax assets (liabilities)
 
$
4,621

 
$
2,790


All Company operations are domestic. We file U.S. and state income tax returns in jurisdictions with varying statutes of limitations. The statute of limitations with regards to our federal income tax filings is three years. The statute of limitations for our state tax jurisdictions is three to four years depending on the jurisdiction. In the normal course of business, we are subject to tax audits in various jurisdictions, and such jurisdictions may assess additional income taxes. We do not expect the outcome of any audit to have a material effect on our consolidated financial statements; however, audit outcomes and the timing of audit adjustments are subject to significant uncertainty.
On December 22, 2017, the President signed into law the U.S. federal income tax legislation commonly referred to as the “Tax Cuts and Jobs Act” (the “Tax Act”), reducing the U.S. federal corporate income tax rate for tax years beginning after December 31, 2017, among other changes. Under ASC 740, Income Taxes (“ASC 740”), the effects of the Tax Act are recognized in the period that includes the date of enactment. The effect of this change impacted our effective tax rate and reduced the value of our deferred tax assets by approximately $1.1 million.