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INCOME TAXES
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Income before income taxes consists of:
Years Ended December 31,202320222021
United States$49,681 $65,350 $101,353 
International325,144 269,354 220,302 
Total$374,825 $334,704 $321,655 
The provision (benefit) for income taxes is composed of:
Years Ended December 31,202320222021
Federal:
Current$11,777 $12,791 $11,932 
Deferred(10,931)(783)(5,980)
$846 $12,008 $5,952 
State:
Current$1,300 $2,265 $4,917 
Deferred(675)(99)(5,188)
$625 $2,166 $(271)
International:
Current$97,455 $92,199 $75,524 
Deferred(8,277)(11,224)(3,188)
$89,178 $80,975 $72,336 
Total$90,649 $95,149 $78,017 
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 31,202320222021
Income tax at statutory rate$78,713 $70,288 $67,547 
State income taxes, net of federal tax effect362 1,475 1,616 
Excess tax benefits from share-based compensation(5,935)(3,306)(16,060)
Deferred tax (benefits) charges, incl. tax rate changes(3,512)(2,349)(1,040)
Valuation allowance158 1,486 4,485 
Legal entity reorganization3,630 5,850 — 
Rate differential on earnings of foreign operations18,917 19,165 20,831 
Other items, net(1,684)2,540 638 
Actual income tax provision$90,649 $95,149 $78,017 
Effective income tax rate24.2 %28.4 %24.3 %
The provision for income taxes for 2023 and 2022 include a $3.6 million and $5.9 million charge, respectively, for taxes related to a legal entity reorganization intended to enhance our dividend and cash management capabilities. The provision for income tax is favorably impacted by excess tax benefits on deductible share-based compensation. The tax provision for 2023 reflects a $5.9 million benefit from this item compared with a $3.3 million and $16.1 million tax benefit for 2022 and 2021, respectively. The valuation allowance for all years reflects 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, 2023 and 2022 are composed of the following temporary differences:
20232022
Deferred Tax Assets:
Net operating loss carryforwards$49,016 $45,823 
Operating and finance leases20,440 20,974 
Pension liabilities13,608 8,178 
Share-based compensation7,326 9,970 
U.S. state tax credits6,110 6,777 
Vacation and bonus16,915 14,681 
U.S. capitalized research expenditures35,563 27,840 
Inventory7,166 4,736 
Accrued liabilities and other reserves9,622 10,346 
Other16,470 11,744 
Total gross deferred tax assets$182,236 $161,069 
Less valuation allowance(48,856)(46,239)
Net deferred tax assets$133,380 $114,830 
Deferred Tax Liabilities:
Acquisition related intangibles$57,426 $59,084 
Depreciation and amortization25,541 29,142 
Operating and finance leases22,715 23,041 
Other6,988 6,563 
Total gross deferred tax liabilities$112,670 $117,830 
Net deferred tax assets (liabilities)
$20,710 $(3,000)
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 $42.7 million of the $49.0 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 $4.1 million has also been established against the $6.1 million of U.S. state tax credit carryforwards.
There is no expiration date on $44.7 million of the tax-effected net operating loss carryforwards and $4.3 million (tax effected) will expire in the years 2024 to 2043. The U.S. state tax credit carryforwards of $6.1 million (tax effected) will expire in the years 2024 to 2038. We have carried forward tax losses in Luxembourg for $131.4 million for which no benefit has been recorded in the Consolidated Financial Statements since there is no expectation of realization.
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. We maintain our assertion that all other cash and distributable reserves at our non-U.S. affiliates will continue to be indefinitely reinvested, with the exception of earnings in Germany and the pre-2020 earnings in Italy, Switzerland and Colombia. 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 $20 million if earnings accumulated outside the U.S. are repatriated to the U.S.
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:
202320222021
Balance at January 1$6,919 $7,225 $4,504 
Increases based on tax positions for the current year985 1,433 262 
Increases (Decreases) based on tax positions of prior years(997)(1,616)3,348 
Settlements(901)(80)(567)
Lapse of statute of limitations(64)(43)(322)
Balance at December 31$5,942 $6,919 $7,225 
As of December 31, 2023, the total amount of unrecognized tax benefits was $5.9 million, of which $5.9 million, if recognized, would favorably impact our effective tax rate. We estimate that it is reasonably possible that the liability for uncertain tax positions will decrease by approximately $1.5 million in the next 12 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, 2023, 2022 and 2021, we had approximately $3.4 million, $4.9 million and $4.6 million, respectively, accrued for the payment of interest and penalties, of which approximately $0.2 million, $0.3 million and $1.1 million was recognized in income tax expense for the years ended December 31, 2023, 2022 and 2021, respectively.
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 — Federal2020-2023
United States — State2019-2023
France2020-2023
Germany2019-2023
Italy2017-2023
China2013-2023