Income Taxes

12 Months Ended

Dec. 31, 2022

Income Taxes

Income Taxes

3.        Income Taxes

The components of income (loss) before income taxes are as follows (in thousands):

	2022		2021		2020
Domestic	$	(56,742)	$	11,574	$	22,704
Income (loss) before income tax provision (benefit)	$	(56,742)	$	11,574	$	22,704

The income tax provision (benefit) for 2022, 2021 and 2020 consists of the following (in thousands):

	2022		2021		2020
Current
Federal	$	—	$	—	$	—
State		1,404		1,294		602
		1,404		1,294		602
Deferred
Federal		(12,416)		(65)		3,998
State		(3,336)		(796)		472
		(15,752)		(861)		4,470
Income tax provision (benefit)	$	(14,348)	$	433	$	5,072

A reconciliation of the income tax provision (benefit) as reported in the consolidated statements of comprehensive income to the amounts computed by applying federal statutory rate of 21% is as follows (in thousands):

	2022		2021		2020
Federal income tax at statutory rate	$	(11,916)	$	2,430	$	4,768
State income taxes, net of federal income tax benefit		(1,856)		499		877
Nondeductible per diem paid to drivers		—		—		1,277
Tax credits		(1,226)		(2,054)		(1,198)
Provision to return adjustment		(179)		(919)		(775)
Valuation allowance		(260)		(31)		(372)
Tax shortfall/(windfall) on share-based compensation		429		(675)		25
Executive compensation limitation		460		1,380		—
Other, net		200		(197)		470
Income tax provision (benefit)	$	(14,348)	$	433	$	5,072

The tax effect of temporary differences that give rise to significant portions of deferred tax assets and liabilities at December 31, 2022 and 2021, consists of the following (in thousands):

	2022		2021
Deferred tax assets
Allowance for doubtful accounts	$	5,882	$	4,229
Insurance and claims reserves		29,038		20,023
Compensation and employee benefits		7,181		7,883
Net operating loss and credit carryforwards		38,532		32,822
Capital loss carryforward		4,780		4,985
Interest expense limitation carryforwards		4,523		115
Finance lease obligations		1,885		705
Operating lease liabilities		82,855		72,751
Unrealized gain on investments		985		—
Other		883		355
Valuation allowance		(5,420)		(5,694)
Total deferred tax assets	$	171,124	$	138,174
Deferred tax liabilities
Property and equipment	$	87,686	$	78,833
Intangibles		6,946		6,965
Prepaid license fees		1,609		1,894
Right of use assets		82,854		72,750
Unrealized gain on investments		—		1,708
Other		578		325
Total deferred tax liabilities	$	179,673	$	162,475
Net deferred tax liability	$	8,549	$	24,301

The Company had approximately $21.7 million and $22.7 million of federal capital loss carryforwards, $51.6 million and $41.5 million of federal operating loss carryforwards, $197.3 million and $147.3 million of state operating loss carryforwards and $1.4 million and $1.0 million of state tax credit carryforwards at December 31, 2022 and 2021, respectively. Federal operating losses created after 2017 of $51.6 million do not expire and may be carried forward indefinitely. The federal credit carryforward of $17.3 million will begin to expire in the years 2031 through 2042. The state loss carryforwards of $197.3 million begin to expire in the years 2023 and forward, depending on the state and may be used to offset otherwise taxable income. State tax credit carryforwards of $1.4 million expire in the years 2023 through 2037.

The Company has a valuation allowance of $5.4 million and $5.7 million at December 31, 2022 and 2021, respectively, to offset the tax benefit of certain state operating loss carryforwards, state credit carryforwards, and federal capital loss carryforwards. The valuation allowance decreased by $0.3 million and $0.3 million during the years ended December 31, 2022 and 2021, respectively, due to the change in capital deferred tax assets, certain separate company state operating loss carryforwards and certain state tax credit carryforwards which the Company does not currently believe it will be able to utilize before the applicable expiration date of each item.

Deferred tax valuation allowances	Balance at
	beginning of		Charges to costs		Charges to other				Balance at end
	period		and expenses		accounts		Deductions		of period
Fiscal year ended
December 31, 2020	$	6,393	$	456	$	—	$	827	$	6,022
December 31, 2021	$	6,022	$	61	$	—	$	389	$	5,694
December 31, 2022	$	5,694	$	22	$	—	$	296	$	5,420

Only tax years 2015 and forward remain subject to examination by federal and state tax jurisdictions, other than the current IRS audit.  This audit is focused on amended federal income tax returns filed for 2009-2012 and relates only to reported changes in fuel tax credits and agricultural chemicals security credits. Due to events related to this IRS exam that occurred in 2018, the Company has released the reserve related to these items.