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INCOME TAXES
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Income before income taxes consists of:
Years Ended December 31,202120202019
United States$101,353 $91,555 $94,612 
International220,302 209,600 247,457 
Total$321,655 $301,155 $342,069 
The provision (benefit) for income taxes is composed of:
Years Ended December 31,202120202019
Current:
U.S. Federal$11,932 $9,934 $2,129 
State/Local4,917 3,094 883 
International75,524 82,235 88,084 
$92,373 $95,263 $91,096 
Deferred:
U.S. Federal/State$(11,168)$(2,270)$4,670 
International(3,188)(5,928)4,076 
$(14,356)$(8,198)$8,746 
Total$78,017 $87,065 $99,842 
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 31,202120202019
Income tax at statutory rate$67,547 $63,243 $71,835 
State income taxes (benefits), net of federal tax effect1,616 2,396 2,622 
Excess tax benefits from share-based compensation(16,060)(11,625)(15,370)
Deferred tax charges (benefits), incl. tax rate changes(1,040)4,110 — 
U.S. Global Intangible Low-Taxed Income ("GILTI") and Base Erosion Anti-Abuse Tax ("BEAT")— (3,909)(1,485)
Valuation allowance4,485 1,332 10,623 
Rate differential on earnings of foreign operations20,831 24,901 32,657 
Other items, net638 6,617 (1,040)
Actual income tax provision$78,017 $87,065 $99,842 
Effective income tax rate24.3 %28.9 %29.2 %
The provision for income tax was favorably impacted by excess tax benefits on deductible share-based compensation. The tax provision for 2021 reflects a $16.1 million benefit from this item compared with a $11.6 million and $15.4 million tax benefit for 2020 and 2019, respectively. The valuation allowance for all years reflects continued losses in jurisdictions where we cannot tax effect the loss. Our mix of earnings has an unfavorable tax rate impact since a majority of our pretax income is earned in higher tax jurisdictions.
Significant deferred tax assets and liabilities as of December 31, 2021 and 2020 are composed of the following temporary differences:
20212020
Deferred Tax Assets:
Net operating loss carryforwards$47,660 $19,353 
Operating and finance leases22,492 24,529 
Pension liabilities29,770 36,085 
Share-based compensation6,764 5,946 
U.S. federal tax credits4,226 8,826 
U.S. state tax credits7,047 7,011 
Vacation and bonus13,450 12,307 
Research and development19,633 8,992 
Inventory6,969 4,854 
Workers compensation3,109 3,353 
Other16,194 16,643 
Total gross deferred tax assets$177,314 $147,899 
Less valuation allowance(47,149)(23,105)
Net deferred tax assets$130,165 $124,794 
Deferred Tax Liabilities:
Acquisition related intangibles$68,174 $57,295 
Depreciation and amortization30,997 27,737 
Operating and finance leases24,560 26,549 
Other7,489 8,044 
Total gross deferred tax liabilities$131,220 $119,625 
Net deferred tax assets (liabilities)$(1,055)$5,169 
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 $41.4 million of the $47.7 million of tax effected net operating loss carryforwards. These losses are generally in locations that have not produced cumulative three year operating profit. During 2021, we recorded a $27 million deferred tax asset for net operating losses as part of the Voluntis acquisition, along with a corresponding $21.5 million valuation allowance. A valuation allowance of $3.8 million has also been established against the $7.0 million of U.S. state tax credit carryforwards.
Approximately $4.0 million of the U.S. federal tax credits will expire in the years 2026 and 2027. There is no expiration date on $43.6 million of the tax-effected net operating loss carryforwards and $4.1 million (tax effected) will expire in the years 2022 to 2041. The U.S. state tax credit carryforwards of $7.0 million (tax effected) will expire in the years 2022 to 2036.
None of the earnings accumulated outside of the U.S. will be subject to U.S. taxation under the current U.S. federal income tax laws. 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 income tax and withholding tax that would be payable on distributions to be in the range of $15 million to $25 million if earnings accumulated outside the U.S. are repatriated to the U.S.
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.
Income Tax Uncertainties
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:
202120202019
Balance at January 1$4,504 $3,647 $3,559 
Increases based on tax positions for the current year262 212 412 
Increases based on tax positions of prior years3,348 790 663 
Settlements(567)— (558)
Lapse of statute of limitations(322)(145)(429)
Balance at December 31$7,225 $4,504 $3,647 
The amount of income tax uncertainties that, if recognized, would impact the effective tax rate is approximately $4.7 million. We estimate that it is reasonably possible that the liability for uncertain tax positions will decrease by approximately $2.8 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, 2021, 2020 and 2019, we had approximately $4.6 million, $3.6 million and $1.7 million, respectively, accrued for the payment of interest and penalties, of which approximately $1.1 million and $1.7 million was recognized in income tax expense for the years ended December 31, 2021 and 2020, respectively, and $0.2 million was recognized as a tax benefit for the year ended 2019.
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 — Federal2018-2021
United States — State2012-2021
France2017-2021
Germany2016-2021
Italy2015-2021
China2011-2021