INCOME TAXES

6 Months Ended

Jun. 30, 2022

INCOME TAXES

INCOME TAXES

NOTE 14: INCOME TAXES

Reconciliations of the Company’s effective tax rates to the statutory corporate tax rates were as follows:

	Three Months Ended June 30,
	2022		2021
Tax at statutory rate	21.0	%	21.0	%
Nontaxable interest and dividends	(0.4)		(0.3)
Tax credits	(1.6)		(1.5)
State taxes	1.9		1.9
Other	(0.4)		(0.3)
	20.5	%	20.8	%

	Six Months Ended June 30,
	2022		2021
Tax at statutory rate	21.0	%	21.0	%
Nontaxable interest and dividends	(0.4)		(0.3)
Tax credits	(1.7)		(1.7)
State taxes	1.7		1.6
Other	(0.1)		0.3
	20.5	%	20.9	%

The Company and its consolidated subsidiaries have not been audited recently by the Internal Revenue Service (IRS). As a result, federal tax years through December 31, 2017 are now closed.

The Company was previously under State of Missouri income and franchise tax examinations for its 2014 and 2015 tax years. The examinations concluded with one unresolved issue related to the exclusion of certain income in the calculation of Missouri income tax. The Missouri Department of Revenue denied the Company’s administrative protest regarding the 2014 and 2015 tax years’ examinations. In June 2021, the Company filed a formal protest with the Missouri Administrative Hearing Commission (MAHC), which has special jurisdiction to hear tax matters and is similar to a trial court, to continue defending the Company’s rights and associated tax position. The Company has engaged legal and tax advisors and continues to believe it will ultimately prevail on the issue; however, if the Company does not prevail, the tax obligation to the State of Missouri could be up to a total of $4.0 million for these tax years and additional amounts could be levied for certain subsequent tax years. The MAHC has received documents from each party but no hearings have occurred to date.

The State of Illinois Department of Revenue recently completed a tax examination of the Company’s Illinois Business Income Tax for the 2018 and 2019 tax years. While we have not received the final report of examination at this time, we have not been made aware of any proposed material changes to the returns.