Income Taxes

9 Months Ended

Sep. 30, 2020

8. INCOME TAXES

The following table reconciles the difference between the statutory federal income tax rate and the Company's effective income tax rate for the nine months ended September 30, 2020:


Statutory rate	21.0	%
Income subject to tonnage tax	(9.7)	%

U.S. federal income tax statutory changes	(106.0)	%
Non-deductible expenses	3.3	%
Noncontrolling interests	0.1	%
Foreign earnings not subject to U.S. income tax	0.3	%
Foreign taxes not creditable against U.S. income tax	2.9	%

Subpart F income	4.8	%
State taxes	3.5	%
Share award plans	1.8	%

	(78.0)	%

On March 27, 2020, the U.S. Congress passed and the President signed the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") into law to address the economic fallout of the 2020 coronavirus pandemic. One provision of the CARES Act increases the tax deduction for net operating losses from 80% to 100% for 2018 through 2020, allows net operating losses generated in 2018 through 2020 to be carried back up to five years and increases the deductible interest expense limit from 30% to 50% of taxable EBITDA. As a result of these statutory changes, during the nine months ended September 30, 2020, the Company determined it will be able to carry its 2019 net operating losses back to tax years when the statutory tax rate was 35% resulting in an income tax benefit of $12.7 million, which is included in income tax expense (benefit) in the accompanying condensed consolidated statements of income.

As of September 30, 2020, $34.2 million of income tax receivables are included in other receivables in the accompanying condensed consolidated balance sheets.