Note 9 - Income Taxes

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE

9

– INCOME TAXES

The Tax Act enacted in

December 2017

reduced the federal corporate tax rate on U.S. earnings to

21%

and moved from a global taxation regime to a modified territorial regime. The Company’s lower effective income tax rate of

21.6%

for the

third

quarter and

first

nine

months of

2018

compared to

28.3%

and

31.3%

for the

third

quarter and

first

nine

months of

2017,

respectively, were due primarily to the Tax Act.

During the

third

quarter and

first

nine

months of

2018,

the Company recorded adjustments of

$0.2

million and

$48,000,

respectively, of income tax benefit to the provisional amounts the Company recorded in the

fourth

quarter of

2017

regarding transitional impacts of the Tax Act. The provisional amounts are based on the Company’s current analysis of the Tax Act. Given the significant complexity of the Tax Act and the potential for additional guidance from the U.S. Treasury, Securities and Exchange Commission or the Financial Accountings Standards Board related to the Tax Act, these estimates

may

be adjusted during the remainder of

2018.

Adjustments to the provisional amounts recorded in the

fourth

quarter of

2017

will affect the Company’s tax expense in the period that the final adjustments are determined, which will be

no

later than the

fourth

quarter of

2018.

The Company is evaluating certain aspects of the Tax Act, including the deferred tax effects of the global intangible low-taxed income (“GILTI”) provision of the Tax Act. Under U.S. GAAP, the Company is allowed to make an accounting policy election to either recognize deferred taxes for temporary differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI resulting from those items in the year the tax is incurred. As of

September 30, 2018,

the Company included GILTI related to current-year operations in its estimated annual effective tax rate, but has

not

yet made a policy decision regarding whether to record deferred taxes on GILTI. The policy decision will be made

no

later than the

fourth

quarter of

2018,

and any impact of the decision will be recorded in the period the decision is made.