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Income Taxes | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | Note 7. Income Taxes Earnings before income taxes were derived from the following sources:
| 2017 |  | 2016 |  | 2015
Domestic | $ | 809.4 |  |  | 739.4 |  |  | 786.0 |
Foreign | 63.7 |  |  | 50.3 |  |  | 40.1 |
Earnings before income taxes | $ | 873.1 |  |  | 789.7 |  |  | 826.1 |
Components of income tax expense (benefit) were as follows:
2017: | Current |  | Deferred |  | Total
Federal | $ | 270.6 |  |  | (33.1 | ) |  | 237.5 |
State | 33.2 |  |  | 3.3 |  |  | 36.5 |
Foreign | 20.5 |  |  | — |  |  | 20.5 |
Income tax expense | $ | 324.3 |  |  | (29.8 | ) |  | 294.5 |
2016: | Current |  | Deferred |  | Total
Federal | $ | 223.9 |  |  | 23.2 |  |  | 247.1 |
State | 28.2 |  |  | 1.2 |  |  | 29.4 |
Foreign | 12.6 |  |  | 1.2 |  |  | 13.8 |
Income tax expense | $ | 264.7 |  |  | 25.6 |  |  | 290.3 |
2015: | Current |  | Deferred |  | Total
Federal | $ | 256.7 |  |  | 7.4 |  |  | 264.1 |
State | 31.3 |  |  | 0.2 |  |  | 31.5 |
Foreign | 13.7 |  |  | 0.4 |  |  | 14.1 |
Income tax expense | $ | 301.7 |  |  | 8.0 |  |  | 309.7 |
Income tax expense in the accompanying consolidated financial statements differed from the expected expense as follows:
| 2017 |  | 2016 |  | 2015
Federal income tax expense at the 'expected' rate of 35% | $ | 305.6 |  |  | 276.4 |  |  | 289.1 |
Increase (decrease) attributed to: |  |  |  |  |
State income taxes, net of federal benefit | 21.5 |  |  | 20.0 |  |  | 21.6 |
Transition tax | 6.5 |  |  | — |  |  | — |
Effect of 2018 deferred rate change | (30.8 | ) |  | — |  |  | — |
Other, net | (8.3 | ) |  | (6.1 | ) |  | (1.0 | )
Total income tax expense | $ | 294.5 |  |  | 290.3 |  |  | 309.7 |
Effective income tax rate | 33.7 | % |  | 36.8 | % |  | 37.5 | %
The tax effects of temporary differences that give rise to deferred income tax assets and liabilities at year end consisted of the following:
| 2017 |  | 2016
Deferred income tax assets (liabilities): |  |  |
Inventory costing and valuation methods | $ | 3.6 |  |  | 4.8 |
Allowance for doubtful accounts | 3.0 |  |  | 4.3 |
Insurance reserves | 8.4 |  |  | 11.5 |
Promotions payable | 1.3 |  |  | 1.7 |
Stock-based compensation | 5.2 |  |  | 6.8 |
Federal and state benefit of uncertain tax positions | 0.9 |  |  | 1.9 |
Foreign net operating loss and credit carryforwards | 4.2 |  |  | 5.1 |
Foreign valuation allowances | (2.8 | ) |  | (4.0 | )
Other, net | 0.8 |  |  | 2.1 |
Total deferred income tax assets | 24.6 |  |  | 34.2 |
Property and equipment | (75.2 | ) |  | (114.8 | )
Total deferred income tax liabilities | (75.2 | ) |  | (114.8 | )
Deferred income tax liabilities | $ | (50.6 | ) |  | (80.6 | )
A reconciliation of the beginning and ending amount of total gross unrecognized tax benefits was as follows:
| 2017 |  | 2016
Balance at beginning of year: | $ | 5.4 |  |  | 5.4 |
Increase related to prior year tax positions | 0.4 |  |  | 0.2 |
Decrease related to prior year tax positions | (0.5 | ) |  | — |
Increase related to current year tax positions | 0.7 |  |  | 0.8 |
Decrease related to statute of limitation lapses | (1.1 | ) |  | (1.0 | )
Settlements | (0.5 | ) |  | — |
Balance at end of year: | $ | 4.4 |  |  | 5.4 |
Included in the liability for gross unrecognized tax benefits is an immaterial amount for interest and penalties, both of which we classify as a component of income tax expense. The amount of gross unrecognized tax benefits that would favorably impact the effective tax rate, if recognized, is not material. We do not anticipate significant changes in total unrecognized tax benefits during the next twelve months. Fastenal files income tax returns in the United States federal jurisdiction, all states, and various local and foreign jurisdictions. With limited exceptions, we are no longer subject to income tax examinations by taxing authorities for taxable years before 2015 in the case of United States federal examinations, and 2013 in the case of foreign, state, and local examinations. On December 22, 2017, the Tax Act was signed into law. The Tax Act makes broad and complex changes to the U.S. tax code that affected our income tax rate in 2017. The Tax Act reduces the U.S. federal corporate income tax rate from 35% to 21% and requires companies to pay a one-time transition tax on certain unrepatriated earnings from foreign subsidiaries that is payable over eight years. The Tax Act also establishes new tax laws that will affect 2018. ASC 740 requires a company to record the effects of a tax law change in the period of enactment, however, shortly after the enactment of the Tax Act, the SEC staff issued SAB 118, which allows a company to record a provisional amount when it does not have the necessary information available, prepared, or analyzed in reasonable detail to complete its accounting for the change in the tax law. The measurement period ends when the company has obtained, prepared and analyzed the information necessary to finalize its accounting, but cannot extend beyond one year. We have made a reasonable estimate of the impact of the Tax Act and recorded discrete items in our 2017 income tax expense of $24.4 which reflects an estimated reduction in our deferred income tax liabilities of $30.8 as a result of the maximum federal rate decrease to 21% from 35% which was partially offset by an estimated increase in income tax payable in the amount of $6.5 as a result of the transition tax on cash and cash equivalent balances related to accumulated earnings associated with our international operations. We are continuing to gather additional information related to estimates surrounding the remeasurement of deferred taxes and to unrepatriated earnings from foreign subsidiaries to more precisely compute the remeasurement of deferred taxes and the impact of the transition tax. In general, it is our practice and intention to permanently reinvest the earnings of our foreign subsidiaries and repatriate earnings only when the tax impact is zero or very minimal and that position has not changed following incurring the transition tax under the Tax Act. No deferred taxes have been provided for withholding taxes or other taxes that would result upon repatriation of our foreign investments to the United States. It is not practicable to estimate the amount of deferred income tax liabilities related to investments in these foreign subsidiaries.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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