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Income Taxes

12 Months Ended

Dec. 31, 2022

Income Taxes

Income Taxes

Note 4. Income Taxes

The company files a consolidated federal income tax return. The current and deferred federal and state income tax expense for the years ended December 31 is as follows (in thousands):

​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	2022		​	2021		​	2020		​
​	Current income tax expense	$	1,107,379	​	$	643,639	​	$	88,914	​
​	Deferred income tax expense	​	34,198	​	​	318,617	​	​	45,736	​
​	Total income tax expense	$	1,141,577	​	$	962,256	​	$	134,650	​

​

​

Note 4. Income Taxes (Continued)

A reconciliation of the statutory rates to the actual effective tax rates for the years ended December 31 are as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

2022

​

2021

​

2020

​

​

Statutory federal tax rate

​

21.0

%

​

​

21.0

%

​

​

21.0

%

​

​

State income taxes, net of federal benefit

​

2.6

​

​

​

2.5

​

​

​

2.6

​

​

​

Release of valuation allowance

​

-

​

​

​

-

​

​

​

(2.9)

​

​

​

Federal research & development credits

​

(0.6)

​

​

​

(0.7)

​

​

​

(2.1)

​

​

​

Other permanent differences

​

(0.3)

​

​

​

0.1

​

​

​

0.5

​

​

​

Effective tax rate

​

22.7

%

​

​

22.9

%

​

​

19.1

%

​

​

​

Significant components of the company’s deferred tax assets and liabilities at December 31 are as follows (in thousands):

​	​	​	​	​	​	​	​
​	​	2022		​	2021		​
​	Deferred tax assets	​	​	​	​	​	​
​	Accrued expenses and allowances	$	34,052	​	$	24,324	​
​	Inventories	​	8,028	​	​	9,088	​
​	Net operating loss carryforwards	​	16,412	​	​	20,333	​
​	Other	​	8,091	​	​	8,776	​
​	​	​	66,583	​	​	62,521	​
​	Less: valuation allowance	​	(805)	​	​	(805)	​
​	Total net deferred tax assets	​	65,778	​	​	61,716	​
​	​	​	​	​	​	​	​
​	Deferred tax liabilities	​	​	​	​	​	​
​	Property, plant and equipment	​	(951,404)	​	​	(846,942)	​
​	Amortizable assets	​	(1,304)	​	​	(62,339)	​
​	Other	​	(2,173)	​	​	(7,340)	​
​	Total deferred tax liabilities	​	(954,881)	​	​	(916,621)	​
​	Net deferred tax liability	$	(889,103)	​	$	(854,905)	​

​

Certain wholly-owned and controlled subsidiaries of the company file separate federal and state income tax returns. One of the controlled subsidiaries generated federal net operating loss carryforwards in the years 2018 and prior, which total $53.8 million at December 31, 2022, and which expire in the years 2035 through 2039, along with state net operating loss carryforwards which expire in the years 2034 through 2039. During the fourth quarter of 2020, the company evaluated the realizability of the net deferred tax assets for this controlled subsidiary. In completing this evaluation, the company considered all available positive and negative evidence in order to determine whether, based on the weight of the evidence, a valuation allowance for its deferred tax assets was necessary. Such evidence included current operating results, historical results, future reversals of existing taxable temporary differences and expectations for future taxable income (exclusive of the reversal of temporary differences and carryforwards), as well as the implementation of feasible and prudent tax planning strategies. Based on the positive evidence, the company concluded that it was more likely than not that the net deferred tax assets would be realized. As a result, $21.2 million of the valuation allowance was reversed in the year ended December 31, 2020. The company continues to maintain a valuation allowance of $805,000 as of December 31, 2022, and 2021, with respect to certain state tax credits of the controlled subsidiary.

​

Note 4. Income Taxes (Continued)

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	2022		​	2021		​	2020		​
​	Balance at January 1	$	20,466	​	$	12,830	​	$	10,162	​
​	Increases related to current year tax positions	​	9,600	​	​	8,250	​	​	4,350	​
​	Increases related to prior year tax positions	​	364	​	​	2,095	​	​	-	​
​	Decreases related to prior year tax positions	​	(1,784)	​	​	(2,709)	​	​	(1,682)	​
​	Balance at December 31	$	28,646	​	$	20,466	​	$	12,830	​

​

​

Included in the balance of unrecognized tax benefits at December 31, 2022 and 2021, are potential benefits of $25.1 million and $16.8 million, respectively, that, if recognized, would affect the effective tax rate. The company recognizes interest and penalties related to its tax contingencies on a net-of-tax basis in income tax expense. During the year ended December 31, 2022, the company recognized expense from the increase of interest expense and penalties of $480,000, net of tax and during the years ended December 31, 2021 and 2020, the company recognized benefits from the decrease of interest expense and penalties of $205,000 and $450,000, respectively, net of tax. In addition to the unrecognized tax benefits in the table above, the company had $1.2 million and $561,000 accrued for the payment of interest and penalties at December 31, 2022 and 2021, respectively.

It is reasonably possible that the amount of unrecognized tax benefits could change in the next twelve months in an amount ranging from zero to $3.3 million, as a result of the expiration of the statute of limitations and other federal and state income tax audits. The company files income tax returns in the U.S. federal jurisdiction as well as income tax returns in various state jurisdictions. The tax years 2019 through 2021 remain open to examination by the Internal Revenue Service and various state and local jurisdictions.

X

- References

No definition available.

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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/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
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-Section S99
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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