Note 9 - Income Taxes

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

INCOME TAXES

NOTE 9—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 and six months ended June 30, 2020 since small changes in estimated income would result in significant changes in the estimated annual effective income tax rate.

During the three months ended June 30, 2020, we recognized $0.4 million of tax expense for the excess of book expense over the tax deduction for vested restricted stock awards. The effective tax rate for the three and six months ended June 30, 2020, excluding this discrete item, was 21% and 16%, respectively. Our effective tax rate for the three and six months ended June 30, 2019 was 17% each period. 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 under U.S. GAAP and federal income tax purposes.