Income Taxes

12 Months Ended

Dec. 31, 2019

The components of our income tax (provision) benefit were as follows for the periods indicated (in thousands):


	Year Ended December 31,
	2019		2018		2017
Current:
Federal	$	164	$	388	$	(1,418)
State	(375)		39		523
Total current	(211)		427		(895)
Deferred:
Federal	(2,063)		(752)		3,722
State	(22)		(184)		118
Total deferred	(2,085)		(936)		3,840
Total (provision for) benefit from income taxes	$	(2,296)	$	(509)	$	2,945

A reconciliation of the (provision for) benefit from income taxes with amounts determined by applying the statutory U.S. federal income tax rate to income before income taxes was as follows for the periods indicated (in thousands):


	Year Ended December 31,
	2019			2018			2017

Pre-tax net book income (loss)	$	10,503		$	3,454		$	(3,427)

Statutory federal income tax (provision) benefit	$	(2,206)		$	(725)		$	1,165
State income tax (provision) benefit	(397)			(145)			736
Federal statutory depletion	—			—			153
Federal tax rate adjustment	—			—			2,007
Valuation allowance	—			—			(1,038)
Reverse valuation allowance	—			98			—
Return to provision adjustments	285			388			—
Other	22			(125)			(78)
Total (provision for) benefit from income taxes	$	(2,296)		$	(509)		$	2,945
Effective income tax rate ^{(1) (2)}	22		%	15		%	86		%

_______________

(1)Excluding the adjustment related to the federal tax rate change, the effective income tax rate for 2018 is 26 percent.

(2)Excluding the adjustment related to the return to provision, the effective income tax rate for 2017 is 58 percent.

Deferred income taxes reflect the net difference between the financial statement carrying amounts and the underlying income tax basis in these items. The components of the federal deferred tax asset (liability) were as follows at the dates indicated (in thousands):


	December 31,
	2019		2018

Long-term deferred tax asset (liability):
Prepaid and other insurance	$	248	$	(170)
Property	(9,953)		(5,259)
Investments in unconsolidated affiliates	525		525
Valuation allowance related to investments in unconsolidated affiliates	(525)		(525)


Net operating loss	3,567		1,436
Other	(184)		(245)
Net long-term deferred tax liability	(6,322)		(4,238)
Net deferred tax liability	$	(6,322)	$	(4,238)

Financial statement recognition and measurement of positions taken, or expected to be taken, by an entity in its income tax returns must consider the uncertainty and judgment involved in the determination and filing of income taxes. Tax positions taken in an income tax return that are recognized in the financial statements must satisfy a more-likely-than-not recognition threshold, assuming that the tax position will be examined by taxing authorities with full knowledge of all relevant information. We have no significant unrecognized tax benefits. Interest and penalties associated with income tax liabilities are classified as income tax expense.

The earliest tax years remaining open for audit for federal and major states of operations are as follows:


			Earliest Open
			Tax Year

Federal			2015
Texas			2015
Louisiana			2016
Michigan			2015

Other Matters

The Tax Cuts and Jobs Act (the “Act”) was signed into law on December 22, 2017. The Act changed many aspects of U.S. corporate income taxation and included a reduction of the corporate income tax rate from 35 percent to 21 percent, implementation of a territorial tax system and imposition of a tax on deemed repatriated earnings of foreign subsidiaries. We recognized the tax effects of the Act in the year ended December 31, 2017 and recorded a $2.0 million tax benefit, which related entirely to the remeasurement of deferred tax liabilities to the 21 percent tax rate.