On December 22, 2017, the U.S. enacted the TCJA, which significantly changed U.S. tax law. The TCJA lowered the Company’s U.S. statutory federal income tax rate from 35% to 21% effective January 1, 2018, while imposing a deemed repatriation tax on previously deferred foreign income.


Years Ended December 31,	2020		2019		2018
Current:
U.S. Federal	$	9,934	$	2,129	$	10,273
State/Local	3,094		883		877
International	82,235		88,084		83,456
	$	95,263	$	91,096	$	94,606
Deferred:
U.S. Federal/State	$	(2,270)	$	4,670	$	(17,019)
International	(5,928)		4,076		(6,333)
	$	(8,198)	$	8,746	$	(23,352)
Total	$	87,065	$	99,842	$	71,254

A reconciliation of the provision for income taxes with the amount computed by applying the statutory federal income tax rate of 21% to income before provision for income taxes is as follows:


Years Ended December 31,	2020			2019			2018
Income tax at statutory rate	$	63,243		$	71,835		$	55,864
State income taxes (benefits), net of federal tax effect	2,396			2,622			(1,516)
Investment incentives	(483)			(2,530)			(1,900)
Tax resolutions	820			(1,915)			(3,400)
Excess tax benefits from share-based compensation	(11,625)			(15,370)			(13,400)
Deferred tax charges (benefits), incl. tax rate changes	4,110			—			(2,800)
U.S. Global Intangible Low-Taxed Income ("GILTI") and Base Erosion Anti-Abuse Tax ("BEAT")	(3,909)			(1,485)			5,625
U.S. tax reform - transition tax	—			—			(2,570)

Valuation allowance	1,332			10,623			3,170
Rate differential on earnings of foreign operations	24,901			32,657			29,024
Other items, net	6,280			3,405			3,157
Actual income tax provision	$	87,065		$	99,842		$	71,254
Effective income tax rate	28.9		%	29.2		%	26.8		%

The 2020 provision for income tax was favorably impacted by excess tax benefits on deductible share-based compensation. The tax provision for 2020 reflects a $11.6 million benefit from this item. The 2020 tax provision reflects a one-time adjustment of U.S. GILTI tax in response to regulations issued by the U.S. Department of the Treasury in July 2020. The 2020 provision also reflects a $3.0 million deferred tax charge to reflect a prior year true-up. Since a majority of our pretax income is earned in higher tax jurisdictions, this mix of income has an unfavorable tax rate impact.

The 2019 tax provision was favorably impacted by excess tax benefits on deductible share-based compensation. The tax provision for 2019 reflects a $15.4 million benefit from this item. The mix of pretax income has an unfavorable impact, because the majority of our income is earned in higher tax jurisdictions. Additionally, we have incurred losses in jurisdictions where we cannot tax effect the loss.

The 2018 tax provision was favorably impacted by excess tax benefits on deductible stock compensation. The tax provision for 2018 reflects a $13.4 million benefit from this item. The mix of pretax income has an unfavorable impact, reflecting that the majority of our income is earned in higher tax jurisdictions. The U.S. GILTI tax and BEAT also had a $5.6 million unfavorable impact.


	2020		2019
Deferred Tax Assets:
Net operating loss carryforwards	$	19,353	$	24,941
Operating and finance leases	24,529		25,440
Pension liabilities	36,085		24,925
Share-based compensation	5,946		6,082
U.S. federal tax credits	8,826		8,575
U.S. state tax credits	7,011		7,881
Vacation and bonus	12,307		7,645
Research and development	8,992		7,539
Inventory	4,854		5,993
Workers compensation	3,353		3,835
Other	16,643		16,496
Total gross deferred tax assets	$	147,899	$	139,352
Less valuation allowance	(23,105)		(23,320)
Net deferred tax assets	$	124,794	$	116,032
Deferred Tax Liabilities:
Acquisition related intangibles	$	57,295	$	62,851
Depreciation and amortization	27,737		28,284
Operating and finance leases	26,549		27,555
Other	8,044		6,215
Total gross deferred tax liabilities	$	119,625	$	124,905
Net deferred tax assets (liabilities)	$	5,169	$	(8,873)

We evaluate the deferred tax assets and record a valuation allowance when it is believed it is more likely than not that the benefit will not be realized. We have established a valuation allowance for $16.7 million of the $19.4 million of tax effected net operating loss carryforwards. These losses are generally in locations that have not produced cumulative three year operating profit. A valuation allowance of $3.7 million has also been established against the $7.0 million of U.S. state tax credit carryforwards.

The U.S. federal tax credits will expire in the years 2026 and 2027. There is no expiration date on $15.8 million of the tax-effected net operating loss carryforwards and $3.6 million (tax effected) will expire in the years 2020 to 2038. The U.S. state tax credit carryforwards of $7.0 million (tax effected) will expire in the years 2021 to 2034.

None of the non-U.S. unremitted earnings will be subject to U.S. taxation. Aside from the pre-2020 earnings in Italy, Switzerland, and Colombia, we maintain our assertion that all other cash and distributable reserves at our non-U.S. affiliates will continue to be indefinitely reinvested. We estimate the amount of additional local and withholding tax that would be payable on distributions to be in the range of $15 million to $25 million.

We have not provided for taxes on certain tax-deferred income related to a foreign operation. The income arose predominately from government grants. Taxes of approximately $1.5 million would become payable in the event the terms of the grant are not fulfilled.

We provide a liability for the amount of tax benefits realized from uncertain tax positions. A reconciliation of the beginning and ending amount of income tax uncertainties is as follows:


	2020		2019		2018
Balance at January 1	$	3,647	$	3,559	$	3,080
Increases based on tax positions for the current year	212		412		360
Increases based on tax positions of prior years	790		663		610
Settlements	—		(558)		(491)
Lapse of statute of limitations	(145)		(429)		—
Balance at December 31	$	4,504	$	3,647	$	3,559

The amount of income tax uncertainties that, if recognized, would impact the effective tax rate is approximately $4.5 million. We estimate that it is reasonably possible that the liability for uncertain tax positions will decrease no more than $2.6 million in the next twelve months from the resolution of various uncertain positions as a result of the completion of tax audits, litigation and the expiration of the statute of limitations in various jurisdictions.

We recognize interest and penalties accrued related to unrecognized tax benefits as a component of income taxes. As of December 31, 2020, 2019 and 2018, we had approximately $3.6 million, $1.7 million and $1.9 million, respectively, accrued for the payment of interest and penalties, of which approximately none and $0.2 million were recognized as a tax benefit for the years ended 2020 and 2019, respectively, and $0.4 million was recognized in income tax expense in the year ended December 31, 2018.

Aptar or its subsidiaries file income tax returns in the U.S. Federal jurisdiction and various state and foreign jurisdictions. The major tax jurisdictions we file in, with the years still subject to income tax examinations, are listed below:


Major Tax Jurisdiction			Tax Years Subject to Examination
United States — Federal			2017-2020
United States — State			2011-2020
France			2017-2020
Germany			2016-2020
Italy			2015-2020
China			2011-2020