INCOME TAXES

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company accounts for income taxes using ASC 740, “Income Taxes” which is an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized differently in the financial statements and the tax returns. The provision for income taxes consists of the following at December 31:

($ in thousands)	2022		2021		2020
Total provision (benefit):	$	7,393	$	3,821	$	829
Federal:
Current	3,330		1,960		(852)
Deferred	1,718		620		1,464
	5,048		2,580		612
State:
Current	2,044		937		(21)
Deferred	301		304		238
	2,345		1,241		217
	$	7,393	$	3,821	$	829

In 2022, the Company’s effective tax rate varies from the statutory federal rate primarily due to permanent differences related to Section 162(m) limitations and state taxes. The Section 162(m) compensation deduction limitations occurred as a result of changes in tax law arising from the 2017 Tax Cuts Jobs Act, which first impacted the Company in 2020. A reconciliation of the provision for income taxes, with the amount computed by applying the statutory Federal income tax rate of 21% in 2022, 2021 and 2020 is as follows for the years ended December 31: 

($ in thousands)	2022			2021			2020
Income tax at statutory rate	$	4,869		$	1,924		$	17
State income taxes, net of Federal benefit	1,851			802			217
Excess stock compensation expense	(147)			34			365
Non-deductible compensation	1,008			539			357
Oil and mineral depletion	(147)			(108)			(101)
Refunds	—			—			(78)
Permanent differences	10			26			16
Stock compensation true-up	—			641			—
Other	(51)			(37)			36
Provision for income taxes	$	7,393		$	3,821		$	829
Effective tax rate	31.9		%	41.7		%	1,011.0		%

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities were as follows at December 31:

($ in thousands)	2022		2021
Deferred income tax assets:
Accrued expenses	$	333	$	429
Deferred revenues	447		544
Capitalization of costs	1,280		1,390
Pension adjustment	1,940		2,342
Stock grant expense	1,364		2,046
State deferred taxes	555		194
Book deferred gains	2,127		2,297
Joint venture allocations	566		593
Provision for additional capitalized costs	699		699
Interest rate swap	335		921
Other	136		77
Total deferred income tax assets	$	9,782	$	11,532
Deferred income tax liabilities:
Deferred gains	$	1,753	$	1,321
Depreciation	4,492		3,722
Cost of sales allocations	872		872
Joint venture allocations	6,900		6,367
Capitalized stock compensation	1,058		958
Straight line rent	348		412
Prepaid expenses	318		399
State deferred taxes	96		190
Interest rate swap	762		—
Other	363		189
Total deferred income tax liabilities	$	16,962	$	14,430
Net deferred income tax (liability)	$	(7,180)	$	(2,898)
Allowance for deferred tax assets	—		—
Net deferred taxes	$	(7,180)	$	(2,898)

Due to the nature of the Company's deferred tax assets, the Company believes they will be used through operations in future years and a valuation allowance is not necessary.

The Company made $8,237,000 in estimated tax payments in 2022 and $730,000 in 2021. The Company received tax refunds of $1,410,000 and $483,000 in 2022 and 2021, respectively.

The Company evaluates its tax positions for all income tax items based on their technical merits to determine whether each position satisfies the “more likely than not to be sustained upon examination” test. The tax benefits are then measured as the largest amount of benefit, determined on a cumulative basis, that is “more likely than not” to be realized upon ultimate settlement. As a result of this evaluation, the Company determined there were no uncertain tax positions that required recognition and measurement for the years ended December 31, 2022 and 2021 within the scope of ASC 740, "Income Taxes." Tax years from 2019 to 2021 and 2018 to 2021 remain available for examination by the Federal and California State taxing authorities, respectively.