Income taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income taxes

Income taxes

The provision (benefit) for income taxes consists of the following (in thousands):

2023	Current		Deferred		Total
Federal	$	96,816	$	14,240	$	111,056
State and other	13,646		5,497		19,143
Total	$	110,462	$	19,737	$	130,199

2022	Current		Deferred		Total
Federal	$	161,438	$	13,435	$	174,873
State and other	23,456		4,041		27,497
Total	$	184,894	$	17,476	$	202,370

2021	Current		Deferred		Total
Federal	$	114,255	$	15,400	$	129,655
State and other	11,310		(5,484)		5,826
Total	$	125,565	$	9,916	$	135,481

Income before income taxes attributable to TEGNA Inc. consists entirely of domestic income.

The provision for income taxes varies from the U.S. federal statutory tax rate as a result of the following differences:

	2023	2022	2021
U.S. statutory tax rate	21.0%	21.0%	21.0%
Increase (decrease) in taxes resulting from:
State taxes (net of federal income tax benefit)	2.3	2.7	2.6
Uncertain tax positions, settlements and lapse of statutes of limitations	(0.2)	—	0.3
Valuation allowance on equity method investment	(0.7)	0.6	—
Other valuation allowances, tax rate changes, & deferred adjustments	0.8	(0.6)	(1.7)
Non-deductible transaction costs	(0.8)	0.5	0.1
Net excess benefits or expense on share-based payments	(0.1)	(0.3)	(0.2)
Non-taxable Merger termination fee	(1.3)	—	—
Other, net	0.5	0.4	—
Effective tax rate	21.5%	24.3%	22.1%

Deferred income taxes reflect temporary differences in the recognition of revenue and expense for tax reporting and financial statement purposes. Deferred tax liabilities and assets are adjusted for changes in tax laws or tax rates of the various tax jurisdictions as of the enacted date.

Deferred tax liabilities and assets were composed of the following as of December 31, 2023 and 2022 (in thousands):

	Dec. 31,
	2023		2022
Deferred tax liabilities
Accelerated amortization of deductible intangibles	$	561,741	$	540,260
Accelerated depreciation	65,247		67,278
Right-of-use assets for operating leases	18,361		19,467
Other	4,024		4,183
Total deferred tax liabilities	649,373		631,188
Deferred tax assets
Accrued compensation costs	22,450		23,439
Pension and post-retirement medical and life	18,839		20,775
Loss carryforwards	16,435		12,537
Operating lease liabilities	19,443		20,403
Other	18,988		24,242
Total deferred tax assets	96,155		101,396
Deferred tax asset valuation allowance	25,001		26,339
Total net deferred tax liabilities	$	578,219	$	556,131

As of December 31, 2023, we had approximately $7.2 million of state net operating loss carryovers that, if not utilized, will expire in various amounts beginning in 2024 through 2042 in addition to $3.7 million of federal and $11.3 million of state interest disallowance carryforwards that do not expire.

Included in total deferred tax assets are valuation allowances of approximately $25.0 million as of December 31, 2023, and $26.3 million as of December 31, 2022, primarily related to federal and state interest disallowance carryforwards, minority investments, state net operating loss carryforwards, accrued compensation costs, and state capital loss carryforwards. This $1.3 million change in valuation allowance is primarily due to the release of valuation allowance on a minority investment partially offset by additional valuation allowances on state net operating loss carryforwards and federal and state interest disallowance carryforwards. If, in the future, we believe that it is more likely than not that these deferred tax assets will be realized, the valuation allowances will be reversed in the Consolidated Statements of Income.

Realization of deferred tax assets for which valuation allowances have not been established is dependent upon generating sufficient future taxable income. We expect to realize the benefit of these deferred tax assets through future reversals of our deferred tax liabilities, through the recognition of taxable income in the allowable carryback and carryforward periods, and through implementation of future tax planning strategies. Although realization is not assured, we believe it is more likely than not that all deferred tax assets for which valuation allowances have not been established will be realized.

The following table summarizes the activity related to deferred tax asset valuation allowances (in thousands):

	2023		2022		2021
Beginning at beginning of period	$	26,339	$	41,929	$	43,467
Additions to valuation allowance	5,001		7,228		6,108
Reductions to valuation allowance	(6,339)		(22,818)		(7,646)
Balance at the end of the period	$	25,001	$	26,339	$	41,929

Tax Matters Agreements

Prior to the May 31, 2017, spin-off of the Cars.com business, we entered into a Tax Matters Agreement with Cars.com Inc. that governs each company’s respective rights, responsibilities, and obligations with respect to tax liabilities and benefits, tax attributes, tax contests and other matters regarding income taxes, non-income taxes and related tax returns. The agreement provides that we will generally indemnify Cars.com against taxes attributable to assets or operations for all tax periods or portions thereof prior to the spin-off date including separately-filed U.S. federal, state, and foreign taxes. Our 2017 tax year is currently under examination by the Internal Revenue Service and the relevant federal statute of limitations remains open until September 30, 2024.

Uncertain Tax Positions

The following table summarizes the activity related to unrecognized tax benefits, excluding the federal tax benefit of state tax deductions (in thousands):

	2023		2022		2021
Change in unrecognized tax benefits
Balance at beginning of year	$	7,725	$	8,196	$	7,435
Additions for tax positions of prior years	151		—		1,363
Reductions for tax positions of prior years	(680)		—		—
Settlements	—		(9)		—
Reductions due to lapse of statutes of limitations	(551)		(462)		(602)
Balance as of end of year	$	6,645	$	7,725	$	8,196

The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was $5.6 million as of December 31, 2023, and $6.4 million as of December 31, 2022. This amount includes the federal tax benefit of state tax deductions.

We recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense. We also recognize interest income attributable to overpayment of income taxes and from the reversal of interest expense previously recorded for uncertain tax positions which are subsequently released as a component of income tax expense. We recorded income from interest for uncertain tax positions of $0.3 million in 2023 while recognizing an expense of $0.2 million in 2022 and $0.7 million in 2021. The amount of accrued interest expense and penalties payable related to unrecognized tax benefits was $0.7 million as of December 31, 2023 and $0.9 million as of December 31, 2022.

We file income tax returns in the U.S. and various state jurisdictions. The 2016 through 2023 tax years remain subject to examination by the Internal Revenue Service and state authorities.

It is reasonably possible that the amount of unrecognized benefit with respect to certain of our unrecognized tax positions will increase or decrease within the next 12 months. These changes may be the result of settlement of ongoing audits, lapses of statutes of limitations or other regulatory developments. At this time, we estimate the amount of our gross unrecognized tax positions may decrease by up to approximately $2.6 million within the next 12 months primarily due to lapses of statutes of limitations and settlement of ongoing audits in various jurisdictions.