12. Income Taxes

Income tax expense (benefit) attributable to income from operations differed from the amount computed by applying the statutory federal income tax rate of 21% as of September 30, 2019 and 2018 to pre-tax income as a result of the following:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Tax at the federal statutory rate	$	1,854	$	420	$	5,278	$	7,402
State income taxes (net of federal benefit)		311		88		885		1,532
Change in state tax rate		1,187		—		1,187		—
2017 qualified timber gains at the federal statutory rate of 23.8% (1)		—		—		—		(524)
Decrease in valuation allowance		—		(3,480)		—		(4,931)
Change in federal AMT credit carryforward (1)		—		(511)		—		(511)
Other		(349)		—		(252)		(153)
Total income tax expense (benefit)	$	3,003	$	(3,483)	$	7,098	$	2,815

(1)

The Bipartisan Budget Act of 2018 was signed into law on February 9, 2018 (the “2018 Act”). The 2018 Act retroactively re-established the preferential 23.8% tax rate on C Corporation Qualified Timber Gains, extending its applicability from 2016 to include the 2017 tax year. The benefit of this retroactive tax rate reduction is included in 2018 income from continuing operations.

On September 12, 2019, the Florida Department of Revenue announced that the corporate income tax rate for tax years 2019, 2020, and 2021 is reduced from 5.5% to 4.458%. As a result, the Company has recorded $1.2 million of income tax expense during both the three and nine months ending September 30, 2019 to adjust its deferred tax balances due to the impact on the Company’s existing Florida net operating loss carried forward in addition to other temporary differences.

Significant judgment is required in evaluating the Company's uncertain tax positions and determining its provision for income taxes. The Company regularly assesses the likelihood of adverse outcomes resulting from potential examinations to determine the adequacy of its provision for income taxes and applies a “more-likely-than-not” in determining the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company has not identified any unrecognized tax benefits as of either September 30, 2019 or December 31, 2018.