Income Taxes

12 Months Ended

Dec. 31, 2020

11. Income Taxes

The provision for income taxes comprises the following (in thousands):


		For the Years Ended December 31,
		2020		2019		2018
Current
U.S. federal	$	58,602	$	36,779	$	23,934
U.S. state and local		15,950		7,078		4,484
Foreign		539		600		452
Deferred
U.S. federal, state and local		1,456		(2,773)		5,185
Foreign		(23)		2		1
Total	$	76,524	$	41,686	$	34,056

A summary of the temporary differences that give rise to deferred tax assets/ (liabilities) follows (in thousands):


		December 31,
		2020		2019
Accrued liabilities	$	42,151	$	32,498
Lease liabilities		35,888		32,476
Implicit price concessions		7,031		4,165
Stock compensation expense		4,047		5,425
State net operating loss carryforwards		2,030		2,678
Other		888		592
Deferred income tax assets		92,035		77,834
Amortization of intangible assets		(40,619)		(39,377)
Right of use lease assets		(32,788)		(28,807)
Accelerated tax depreciation		(31,686)		(21,942)
Currents assets		(3,921)		(2,510)
Market valuation of investments		(2,382)		(2,058)
State income taxes		(1,161)		(1,477)
Other		(142)		(167)
Deferred income tax liabilities		(112,699)		(96,338)
Net deferred income tax liabilities	$	(20,664)	$	(18,504)

At December 31, 2020 and 2019, state net operating loss carryforwards were $37.3 million and $43.1 million, respectively. These net operating losses will expire, in varying amounts, between 2025 and 2040. Based on our history of operating earnings, we have determined that our operating income will, more likely than not, be sufficient to ensure realization of our deferred income tax assets.

A reconciliation of the beginning and ending of year amount of our unrecognized tax benefit is as follows (in thousands):


		2020		2019		2018
Balance at January 1,	$	1,323	$	1,348	$	1,123
Unrecognized tax benefits due to positions taken in current year		200		234		453
Decrease due to expiration of statute of limitations		(219)		(259)		(228)
Balance at December 31,	$	1,304	$	1,323	$	1,348

We file tax returns in the U.S. federal jurisdiction and various states. The years ended December 31, 2017 and forward remain open for review for federal income tax purposes. The earliest open year relating to any of our major state jurisdictions is the fiscal year ended December 31, 2015. During the next twelve months, we do not anticipate a material net change in unrecognized tax benefits.

We classify interest related to our accrual for uncertain tax positions in separate interest accounts. As of December 31, 2020, and 2019, we have approximately $163,000 and $159,000, respectively, accrued in interest payable related to uncertain tax positions. These accruals are included in other current liabilities in the accompanying consolidated balance sheet. Net interest expense related to uncertain tax positions included in interest expense in the accompanying consolidated statement of income is not material.

The difference between the actual income tax provision for continuing operations and the income tax provision calculated at the statutory U.S. federal tax rate is explained as follows (in thousands):


		For the Years Ended December 31,
		2020			2019			2018

Income tax provision calculated using the statutory rate of 21%	$	83,158		$	54,938		$	50,316
Excess stock compensation tax benefits		(26,089)			(24,177)			(22,862)
State and local income taxes, less federal income tax effect		13,855			7,880			7,150
Nondeductible expenses		5,377			3,048			2,280
Other--net		223			(3)			(2,828)
Income tax provision	$	76,524		$	41,686		$	34,056
Effective tax rate		19.3	%		15.9	%		14.2	%

Summarized below are the total amounts of income taxes paid during the years ended December 31 (in thousands):


2020	$	61,517
2019		44,063
2018		9,749

Provision has not been made for additional taxes on $35.1 million of undistributed earnings of our domestic subsidiaries. Should we elect to sell our interest in these businesses rather than to affect a tax-free liquidation, additional taxes amounting to approximately $8.4 million would be incurred based on current income tax rates.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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