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Income Taxes

12 Months Ended

Dec. 31, 2021

Income Taxes [Abstract]

Income Taxes

16.   INCOME TAXES

The Company’s operations are conducted through its various subsidiaries in countries throughout the world. The Company has provided for income taxes based upon the tax laws and rates in the countries in which operations are conducted and income is earned.

Income before provision for income taxes consists of the following:

​

​	​	​	​	​	​	​	​	​	​
​	​	Years Ended December 31,
​		2021			2020			2019
U.S.	​	$	574,737	​	$	22,349	​	$	477,203
Non – U.S.	​		196,005	​		231,565	​		228,688
Income before income taxes	​	$	770,742	​	$	253,914	​	$	705,891

​

The provision for income taxes consists of the following:

​

​	​	​	​	​	​	​	​	​	​
​	​	Years Ended December 31,
​		2021			2020			2019
Current:	​	​	​	​	​	​	​	​	​
U.S. Federal	​	$	71,180	​	$	65,143	​	$	45,475
State	​		34,439	​		28,325	​		27,528
Non – U.S.	​		32,071	​		6,941	​		11,570
​	​		137,690	​		100,409	​		84,573
Deferred:	​			​			​
U.S. Federal	​		51,534	​		(36,659)	​		58,291
State	​		5,093	​		(8,762)	​		6,331
Non – U.S.	​		(42,064)	​		(5,066)	​		(9,985)
​	​		14,563	​		(50,487)	​		54,637
Provision for income taxes	​	$	152,253	​	$	49,922	​	$	139,210

​

The Company is organized under the laws of Ontario, Canada; however, since the proportion of U.S. revenues, assets, operating income and associated tax provisions is significantly greater than any other single taxing jurisdiction within the worldwide group, the reconciliation of the differences between the Company’s income tax provision as presented in the accompanying Consolidated Statements of Net Income and income tax provision computed at the federal statutory rate is presented on the basis of the U.S. federal statutory income tax rate of 21%, as opposed to the Canadian statutory rate of

approximately 27% to provide a more meaningful insight into those differences. The items shown in the following table are a percentage of pre-tax income:

​

​	​	​	​	​	​	​	​
​	​	Years Ended December 31,
​		2021		2020		2019
U.S. federal statutory rate	​	21.0	%	21.0	%	21.0	%
State taxes, net of federal benefit		4.7		4.5		4.4	​
Deferred income tax liability adjustments		0.3		1.6		0.6	​
Effect of international operations		(6.3)		(7.0)		(6.3)	​
Other		0.1		(0.4)		—	​
​		19.8	%	19.7	%	19.7	%

​

The comparability of the Company’s income tax provision for the reported periods has been affected by variations in its income before income taxes.

The effects of international operations are primarily due to a portion of the Company’s income from internal financing that is taxed at effective rates substantially lower than the U.S. federal statutory rate.  For the year ended December 31, 2020, the Company’s income tax provision included a $27,358 expense associated with certain 2019 inter-entity payments no longer being deductible for tax purposes due to the finalization of tax regulations on April 7, 2020 under Internal Revenue Code Section 267A and a $4,148 expense related to an increase in the Company’s deferred income tax liabilities resulting from the impairment of certain assets within its E&P waste operations which impacted the geographical apportionment of its state income taxes.  Additionally, for the year ended December 31, 2019, a reduction in deferred income tax assets primarily related to compensation of executive officers no longer deemed deductible for tax purposes resulted in an increase to tax expense of $3,805.

The significant components of deferred income tax assets and liabilities, reduced by valuation allowances as applicable, are presented below.

​

​	​	​	​	​	​	​
​		December 31,
​	​	2021			2020
Deferred income tax assets:		​			​
Accrued expenses	​	$	31,840	​	$	26,600
Compensation	​		22,545	​		18,150
Contingent liabilities	​		21,268	​		17,652
Tax credits and loss carryforwards	​		24,415	​		24,044
Interest rate and fuel hedges	​		13,536	​		25,093
Finance costs	​		24,264	​		—
Other	​	​	—	​	​	872
Gross deferred income tax assets	​		137,868	​		112,411
Less:  Valuation allowance	​		—	​		—
Total deferred income tax assets	​		137,868	​		112,411
​	​	​	​	​	​	​
Deferred income tax liabilities:	​	​	​	​	​	​
Goodwill and other intangibles	​		(397,855)	​		(332,097)
Property and equipment	​		(484,519)	​		(440,019)
Landfill closure/post-closure	​		(18,597)	​		(13,846)
Prepaid expenses	​		(11,534)	​		(14,990)
Investment in subsidiaries	​		(69,286)	​		(69,391)
Finance costs	​	​	—	​	​	(2,112)
Other	​	​	(6,998)	​	​	—
Total deferred income tax liabilities	​		(988,789)	​		(872,455)
Net deferred income tax liability	​	$	(850,921)	​	$	(760,044)

​

The Company has $47,966 of Canadian tax loss carryforwards with a 20-year carryforward period which will begin to expire in 2036, as well as various U.S. state tax losses with carryforward periods up to 20 years.

As of December 31, 2021, the Company had undistributed earnings of approximately $2,860,889 for which income taxes have not been provided on permanently reinvested earnings of approximately $1,685,889. Additionally, the Company has not recorded deferred taxes on the amount of financial reporting basis in excess of tax basis of approximately $340,308 attributable to the Company’s non-U.S. subsidiaries which are permanently reinvested. It is not practical to estimate the additional tax that may become payable upon the eventual repatriation of these amounts; however, the tax impacts could result in a material increase to the Company’s effective tax rate.

The Company and its subsidiaries are subject to U.S. federal and Canadian income tax, which are its principal operating jurisdictions. The Company has concluded all U.S. federal income tax matters for years through 2017. Additionally, the normal reassessment period for the Company has expired for all Canadian federal income tax matters for years through 2016.

The Company did not have any unrecognized tax benefits recorded at December 31, 2021, 2020 or 2019. The Company does not anticipate the total amount of unrecognized tax benefits will significantly change by December 31, 2022. The Company recognizes interest and/or penalties related to income tax matters in income tax expense.

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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.

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