Note 8 - Income Taxes

3 Months Ended

Mar. 31, 2020

Notes to Financial Statements

INCOME TAXES

NOTE 8—INCOME TAXES

Income tax provisions for interim quarterly periods are generally based on an estimated annual effective income tax rate calculated separately from the effect of significant, infrequent or unusual items related specifically to interim periods. We used a discrete effective tax rate to calculate taxes for the three months ended March 31, 2020 since small changes in estimated income would result in significant changes in the estimated annual effective income tax rate.

The effective tax rate for the three months ended March 31, 2020 was 5%, compared to 16% for the three months ended March 31, 2019. The primary difference from the federal statutory rate of 21% is related to state taxes, permanent differences for non-deductible expenses and the difference in depletion expense between U.S. GAAP and federal income tax purposes.