Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The amounts provided for income taxes were as follows:

	Year Ended December 31,
	2021		2020		2019
Current:
U.S. Federal	$	33,398	$	30,583	$	31,002
State	14,945		12,910		9,705
	48,343		43,493		40,707
Deferred:
U.S. Federal	11,399		7,343		(6,075)
State	3,065		3,285		(3,547)
	14,464		10,628		(9,622)
Total	$	62,807	$	54,121	$	31,085

The tax effect of temporary differences which give rise to a significant portion of deferred tax assets and liabilities is as follows:

	December 31, 2021		December 31, 2020
Deferred tax assets:
Employee benefit accruals	$	7,828	$	10,529
Impairment of investments	12,337		13,961
Impact of timing of settlement payments	10,854		20,137
Various U.S. federal and state tax loss carryforwards	2,378		3,123
Operating lease liabilities	3,277		3,884
Current expected credit losses	4,111		4,299
Other	3,910		2,852
	44,695		58,785
Less: Valuation allowance	(348)		(852)
Net deferred tax assets	$	44,347	$	57,933
Deferred tax liabilities:
Basis differences on non-consolidated entities	$	(24,441)	$	(22,809)
Basis differences on fixed and intangible assets	(35,154)		(35,555)
Basis differences on inventory	(10,808)		(10,698)
Basis differences on long-term investments	(4,383)		(912)
Basis differences on available for sale securities	(1,490)		(3,579)
Operating lease right of use assets	(2,839)		(3,324)
	$	(79,115)	$	(76,877)
Net deferred tax liabilities	$	(34,768)	$	(18,944)

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The Company files a consolidated U.S. income tax return that includes its more than 80%-owned U.S. subsidiaries. Stand alone subsidiaries had tax-effected federal and state and local net operating loss (“NOL”) carryforwards of $2,378 and $3,123 at December 31, 2021 and 2020, respectively, expiring through tax year 2027. The Company records a valuation allowance against deferred tax assets if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company had valuation allowances of $348 and $852 at December 31, 2021 and 2020, respectively. The valuation allowances at December 31, 2021 and 2020 primarily related to state net operating loss carryforwards of stand alone subsidiaries.

On March 27, 2020, the President of the United States signed the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act into law. The Act includes several significant tax and payroll-related provisions for corporations, including the usage of net operating losses, bonus depreciation, interest expense, and certain payroll benefits. The Company determined that there was a minimal impact of the CARES Act on its financial statements and required disclosures.

The consolidated balance sheets of the Company include deferred income tax assets and liabilities, which represent temporary differences in the application of accounting rules established by U.S. GAAP and income tax laws.

Differences between the amounts provided for income taxes and amounts computed at the federal statutory tax rate are summarized as follows:

	Year Ended December 31,
	2021		2020		2019
Income before provision for income taxes	$	209,961	$	181,043	$	125,015
Federal income tax expense at statutory rate	44,092		38,018		26,253
Increases (decreases) resulting from:
State income taxes, net of federal income tax benefits	13,946		12,974		6,047
Non-deductible expenses	6,205		2,859		2,048
Excess tax benefits on stock-based compensation	(561)		(206)		(1,488)
Changes in valuation allowance, net of equity and tax audit adjustments	(504)		(440)		(2,525)
Other	(371)		916		750
Income tax expense	$	62,807	$	54,121	$	31,085

The Company’s income tax expense is principally attributable to the Company’s federal and state income taxes based on the Company’s earnings. The non-deductible expenses presented in the table above largely relate to the Company’s non-deductible executive compensation and spin-off expenses. The federal and state NOLs and valuation allowance are decreased by the spin-off entity and NOLs expiration.

The following table summarizes the activity related to the unrecognized tax benefits:

Balance at January 1, 2019	$	391
Additions based on tax positions related to prior years	1,586
Expirations of the statute of limitations	(330)
Balance at December 31, 2019	1,647
Additions based on tax positions related to prior years	458
Settlements	(402)
Expirations of the statute of limitations	(50)
Balance at December 31, 2020	1,653
Additions based on tax positions related to prior years	1,640
Settlements	(1,065)
Expirations of the statute of limitations	(19)
Balance at December 31, 2021	$	2,209

In the event the unrecognized tax benefits of $2,209 at December 31, 2021 were recognized, such recognition would impact the effective tax rate. The Company classifies all tax-related interest and penalties as income tax expense.

It is reasonably possible the Company may recognize up to approximately $45 of unrecognized tax benefits over the next 12 months, primarily pertaining to expiring statutes of limitations on prior state and local income tax return positions.

The Company files U.S. and state and local income tax returns in jurisdictions with varying statutes of limitations. The Company, from time to time, receives notices related to audits and adjustments related to its partnerships.