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Note 7 - Income Taxes
 12 Months Ended
Dec. 31, 2021
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

7.

Income Taxes

 

Income tax expense attributable to earnings before income taxes consists of (in thousands):

 

 

  

Years ended December 31,

 
  

2021

  

2020

  

2019

 

Current:

            

Federal

 $142,542  $138,952  $87,977 

State and local

  43,004   28,094   20,981 
   185,546   167,046   108,958 

Deferred:

            

Federal

  43,900   (2,392)  51,229 

State and local

  9,520   (4,664)  4,388 
   53,420   (7,056)  55,617 

Total tax expense/(benefit)

 $238,966  $159,990  $164,575 

 

Income tax expense attributable to earnings before income taxes differed from the amounts computed using the statutory federal income tax rate of 21% as follows (in thousands):

 

  

Years ended December 31,

 
  

2021

  

2020

  

2019

 

Income tax at federal statutory rate

 $209,952  $139,865  $142,988 

State tax, net of federal effect

  37,223   20,071   19,293 

Benefit of stock compensation

  (7,583

)

  (3,503

)

  (1,238

)

199/R&D credit

  (1,524)  -   (200

)

Nondeductible meals and entertainment

  130   1,344   1,688 

Change in effective state tax rate, net of federal benefit

  (724)  98   1,562 

Other, net

  1,492   2,115   482 

Total tax expense

 $238,966  $159,990  $164,575 

 

Income taxes receivable was $33.7 million and $3.1 million at December 31, 2021 and 2020, respectively. These amounts have been included in other receivables in our Consolidated Balance Sheets. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2021 and 2020, are presented below (in thousands):

 

  

December 31,

 
  

2021

  

2020

 

Deferred tax assets:

        

Insurance accruals

 $27,487  $24,304 

Allowance for doubtful accounts

  8,886   9,270 

Compensation accrual

  22,061   10,809 

CARES Act payroll tax deferral

  9,955   19,931 

Deferred compensation accrual

  28,937   25,702 

Federal benefit of state uncertain tax positions

  12,870   10,312 

Lease liabilities

  43,850   32,625 

State NOL carry-forward

  7,303   8,460 

Other

  5,549   4,237 

Total gross deferred tax assets

  166,898   145,650 

Valuation allowance

  (7,303

)

  (8,460

)

Total deferred tax assets, net of valuation allowance

  159,595   137,190 

Deferred tax liabilities:

        

Plant and equipment, principally due to differences in depreciation

  816,744   748,883 

Prepaid permits and insurance, principally due to expensing for income tax purposes

  44,132   42,126 

Lease right-of-use assets

  44,161   32,952 

Other

  -   5,251 

Total gross deferred tax liabilities

  905,037   829,212 

Net deferred tax liability

 $745,442  $692,022 

 

Guidance on accounting for uncertainty in income taxes prescribes recognition and measurement criteria and requires that we assess whether the benefits of our tax positions taken are more likely than not of being sustained under tax audits.  We have made adjustments to the balance of unrecognized tax benefits, a component of other long-term liabilities on our Consolidated Balance Sheets, as follows (in millions):

 

  

December 31,

 
  

2021

  

2020

  

2019

 

Beginning balance

 $66.1  $50.6  $52.2 

Additions based on tax positions related to the current year

  14.9   9.8   11.0 

Additions/(reductions) based on tax positions taken in prior years

  4.8   13.9   (6.5

)

Reductions due to settlements

  (0.9

)

  (1.0

)

  - 

Reductions due to lapse of applicable statute of limitations

  (6.4

)

  (7.2

)

  (6.1

)

Ending balance

 $78.5  $66.1  $50.6 

 

At December 31, 2021 and 2020, we had a total of $78.5 million and $66.1 million, respectively, in gross unrecognized tax benefits.  Of these amounts, $67.2 million and $57.1 million represent the amount of unrecognized tax benefits that, if recognized, would impact our effective tax rate in 2021 and 2020, respectively.  Interest and penalties related to income taxes are classified as interest expense in our Consolidated Statements of Earnings.  The amount of accrued interest and penalties recognized during the years ended December 31, 2021, 2020, and 2019, was $3.5 million, $2.9 million, and $3.2 million, respectively. Future changes to unrecognized tax benefits will be recognized as income tax expense and interest expense, as appropriate.  The total amount of accrued interest and penalties for such unrecognized tax benefits at December 31, 2021 and 2020, was $6.4 million and $5.6 million, respectively. No material change in unrecognized tax benefits is expected in the next 12 months.

 

Tax years 2018 and forward remain subject to examination by federal tax jurisdictions, while tax years 2011 and forward remain open for state jurisdictions.