Income Taxes

12 Months Ended

Dec. 31, 2021

Income Taxes

5- Income taxes

(5)  Income Taxes

The items comprising Provision for Income Taxes are as follows (in thousands):

	Year ended December 31,
	2021			2020		2019
Current    — Federal	$	7,445		$	3,166	$	3,508
— State		1,615			904		1,090
		9,060			4,070		4,598
Deferred  — Federal		(3,349	)		2,111		1,660
— State		(337	)		171		149
		(3,686	)		2,282		1,809
Provision for Income Taxes	$	5,374		$	6,352	$	6,407

Temporary differences and carryforwards which have given rise to deferred tax assets and liabilities as of December 31, 2021 and 2020 are as follows (in thousands):

	2021			2020
Deferred tax assets
Benefit plans	$	1,853		$	1,976
Inventories		336			420
Capital loss carryover		--			544
Other		--			179
Total deferred tax assets		2,189			3,119
Valuation allowance		(36	)		(580	)
Net deferred tax assets		2,153			2,539
Deferred tax liabilities
Property, plant, and equipment		7,289			11,532
Patents and goodwill		1,773			1,775
Other		173			--
Total deferred tax liabilities		9,235			13,307
Net deferred tax liabilities	$	7,082		$	10,768

Total income tax expense differs from the amount that would be provided by applying the statutory federal income tax rate to pretax earnings as illustrated below (in thousands):

	Year ended December 31,
	2021			2020			2019
Income tax expense at the statutory federal income tax rate	$	8,070		$	8,078		$	9,065
Increase (decrease) resulting from:
State income taxes		1,027			839			978
R&D tax credits		(1,703	)		(1,589	)		(1,470	)
Foreign-derived intangible income deduction		(2,091	)		(1,051	)		(1,700	)
Excess tax benefit from stock compensation		(185	)		(81	)		(412	)
Uncertain tax positions		--			(450	)		(42	)
Other, net		256			606			(12	)
Provision for Income Taxes	$	5,374		$	6,352		$	6,407

At December 31, 2021, our deferred tax valuation allowance decreased to $36 thousand primarily due to the expiration of a deferred tax asset for a remaining capital loss carryover deduction of $2.5 million which expired in 2021.

A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits as required by ASC 740 is as follows (in thousands):

Gross unrecognized tax benefits at January 1, 2019	$	493
Increase in tax positions for prior years		19
Increase in tax positions for current years		--
Lapse in statutes of limitation		(62	)
Gross unrecognized tax benefits at December 31, 2019	$	450
Increase in tax positions for prior years		8
Increase in tax positions for current year		--
Lapse in statutes of limitation		(458	)
Gross unrecognized tax benefits at December 31, 2020	$	--
Increase in tax positions for prior years		--
Increase in tax positions for current year		--
Lapse in statutes of limitation		--
Gross unrecognized tax benefits at December 31, 2021	$	--

We are subject to United States federal income tax as well as to income tax of multiple state jurisdictions. We have concluded all United States federal income tax matters, as well as all material state and local income tax matters, for years through 2016. The Internal Revenue Service is currently auditing our 2017 and 2018 federal tax returns.

We recognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense. The liability for unrecognized tax benefits included accrued interest of $20 thousand at December 31, 2019. Tax expense included a net interest benefit of $0 for the year ended December 31, 2021, $35 thousand for the year ended December 31, 2020, and $16 thousand for the year ended December 31, 2019.