On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act ("the Tax Act”). The Tax Act made broad and complex changes to the U.S. tax code by, among other things, reducing the federal corporate income tax rate, requiring payment of a one-time transition tax on unrepatriated earnings of foreign subsidiaries, generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries, creating a new limitation on deductible interest expense, creating a bonus depreciation that will allow for full expensing on qualified property, and imposing limitation on deductibility of certain executive compensation. The Tax Act reduced the U.S. corporate income tax rate from 35% to 21% effective January 1, 2018.

In accordance with SAB 118, we recognized a provisional $146.2 million net tax benefit related to deemed repatriated earnings and the remeasurement of deferred tax assets and liabilities in our consolidated financial statements for the year ended December 31, 2017. During 2018, we recognized a net $16.1 million discrete tax benefit for adjustments to the provisional tax amounts allowed under SAB 118. The accounting for the income tax effects of the Tax Act was finalized in the fourth quarter of 2018 based on the regulatory guidance, interpretations, and data available as of December 31, 2018.

As of December 31, 2019, foreign withholding taxes have not been provided on the estimated $259.8 million of undistributed earnings and profits (E&P) of our foreign subsidiaries as we intend to permanently reinvest these foreign E&P in those businesses outside the U.S. However, if we were to repatriate such foreign E&P, the foreign withholding tax liability is estimated to be $13.4 million.

Beginning in 2018, the Tax Act includes a new U.S. tax base erosion provision designed to tax global intangible low-taxed income (“GILTI”). We made a policy election to account for GILTI as a period cost. However, the tax impacts of GILTI provisions are not material to our consolidated financial statements.



	Years Ended December 31,
	2019			2018			2017
	(In thousands)
Current:
United States	$	51,664		$	18,138		$	154,128
Foreign	7,059			10,541			12,187
State	12,908			6,974			4,934
Total current income taxes	71,631			35,653			171,249
Deferred:
United States	$	12,973		$	(48,565	)	$	(314,389	)
Foreign	(571		)	386			618
State	10,628			6,700			(4,067		)
Total deferred income taxes	23,030			(41,479		)	(317,838		)
Total income taxes	$	94,661		$	(5,826	)	$	(146,589	)

We made income tax payments of $70.6 million, $65.4 million, and $170.2 million in 2019, 2018, and 2017, respectively, and received refunds of $4.7 million, $11.4 million, and $3.4 million, respectively. The income tax payments for 2017 include$34.2 million in settlement payments to the IRS.



	Years Ended December 31,
	2019			2018			2017
	(In thousands)
Computed tax provision at the applicable federal statutory income tax rate	$	97,531		$	92,764		$	140,090
State and local taxes, net of federal income tax benefits	20,081			10,146			8,216
Foreign jurisdiction differences	1,646			2,377			(6,782		)
Permanent differences associated with divestitures	1,288			790			1,925
Changes in uncertain tax positions and audit settlements	(9,842		)	(88,687		)	(105,821		)
Foreign valuation allowance, net of federal income tax benefits	43			(431		)	1,186
Enactment of U.S. Tax Act	—			(16,105		)	(146,160		)
Excess tax benefit from share-based compensation	(13,868		)	(11,159		)	(18,521		)
Other	(2,218		)	4,479			(20,722		)
Provision (benefit from) for income taxes	$	94,661		$	(5,826	)	$	(146,589	)
Total consolidated effective tax rate	20.4		%	(1.3		)%	(36.6		)%

The effective tax rate for the twelve months ended December 31, 2019 was lower than the federal statutory tax rate of 21% primarily due to the reduction in tax liability as a result of the expiration of statute of limitations and higher excess tax benefits on the increased exercises of stock options, The effective tax rate for the twelve months ended December 31, 2018 was lower than the federal statutory tax rate of 21% primarily due to the reduction in uncertain tax positions as a result of the expiration of statutes of limitations. The lower effective tax rate for the twelve months ended December 31, 2017 was primarily due to the effects of the Tax Act discussed above and the IRS audit settlement.

Deferred taxes are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates. The tax effects of temporary differences and carryforwards that give rise to significant portions of deferred tax assets and liabilities consisted of the following:



	Years Ended December 31,
	2019			2018
	(In thousands)
Inventories and cemetery property	$	(212,498	)	$	(220,537	)
Deferred incremental direct selling costs	(76,692		)	(73,696		)
Property and equipment	(139,548		)	(122,281		)
Intangibles	(199,906		)	(197,815		)
Other	(1,893		)	—
Deferred tax liabilities	(630,537		)	(614,329		)
Loss and tax credit carryforwards	143,391			153,688
Deferred revenue on preneed funeral and cemetery contracts	113,171			113,970
Accrued liabilities	67,489			63,558
Other	—			90
Deferred tax assets	324,051			331,306
Less: valuation allowance	(114,331		)	(120,931		)
Net deferred income tax liability	$	(420,817	)	$	(403,954	)



	Federal, State, and Foreign Tax
	(In thousands)
Balance at December 31, 2016	$	178,326
Reductions to tax positions as a result of audit settlement	(30,333		)
Reductions to tax positions related to prior years	(68,538		)
Balance at December 31, 2017	$	79,455
Additions to tax positions related to prior years	1,348
Reduction to tax positions due to expiration of statutes of limitations	(79,455		)
Balance at December 31, 2018	$	1,348
Reductions to tax positions related to prior years	—
Balance at December 31, 2019	$	1,348

We include potential accrued interest and penalties related to unrecognized tax benefits within our income tax provision account. We have accrued $0.6 million, $0.5 million, and $11.1 million for the payment of interest, net of tax benefits, and penalties as of December 31, 2019, 2018, and 2017, respectively. We recorded an increase of $0.1 million interest and penalties and a decrease of $10.6 million and $46.2 million for the years ended December 31, 2019, 2018, and 2017, respectively. To the extent interest and penalties are not assessed with respect to uncertain tax positions or the uncertainty of deductions in the future, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision.

We file income tax returns, including tax returns for our subsidiaries, with federal, state, local, and foreign jurisdictions. We consider the United States to be our most significant jurisdiction; however, all tax returns are subject to routine compliance review by the taxing authorities in the jurisdictions in which we file tax returns in the ordinary course of business.

In March 2017, we received from the IRS Office of Appeals the fully executed Form 870-AD for the years 1999-2005, which effectively settled the issues under audit for those years. As a result of this resolution, we recognized a reduction in our unrecognized tax benefits and associated interest of $143.0 million. In 2017, we made $34.2 million in settlement payments to the IRS and subsequently in 2018 and 2019 received federal and state refunds totaling $5.6 million and $2.0 million, respectively. The federal statutes of limitations have expired for all tax years prior to 2016, and we are not currently under audit by the IRS. Various state jurisdictions are auditing years 2013 through 2017. There are currently no federal or provincial audits in Canada; however, years subsequent to 2014 remain open and could be subject to examination. It is reasonably possible that the amount of unrecognized tax benefits may change within the next twelve months. However, given the number of years that remain subject to examination and the number of matters being examined, an estimate of the range of the possible increase or decrease cannot be made.



	Federal		State		Foreign		Total
	(In thousands)
2020	$	—	$	172,219	$	—	$	172,219
2021	—		150,106		—		150,106
2022	—		78,589		—		78,589
2023	—		228,210		—		228,210
Thereafter	1,211		1,828,046		11,147		1,840,404
Total	$	1,211	$	2,457,170	$	11,147	$	2,469,528

In assessing the usefulness of deferred tax assets, we consider whether it is more likely than not that some portion or all of the net deferred tax assets will not be realized. The ultimate realization of net deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. During 2018, we recorded a net $6.6 million decrease in our state valuation allowance due primarily to the legislative change in Iowa and increased activity in Indiana as a result of the Gibraltar acquisition. We also recorded a $43 thousand increase in our foreign valuation allowance due primarily to continuing cumulative operating losses in the Netherlands. The valuation allowances can be affected in future periods by changes to tax laws, changes to statutory tax rates, and changes in estimates of future taxable income.