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Note 16 - Income Tax | 12 Months Ended
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Dec. 31, 2020
Notes to Financial Statements |
Income Tax Disclosure [Text Block] |
16. | Income tax
Income tax differs from the amounts that would be obtained by applying the statutory rate to the respective year's earnings before tax. Differences result from the following items:
|  | 2020 |  | 2019
Income tax expense using combined statutory rate of 26.5% (2019 - 26.5%, 2018 - 26.5%) |  | $ | 38,545 |  |  | $ | (53,128 | )
Permanent differences |  |  | 820 |  |  |  | 1,566 |
Tax effect of flow through entities |  |  | - |  |  |  | (307 | )
Adjustments to tax liabilities for prior periods |  |  | 882 |  |  |  | (328 | )
Non-deductible stock-based compensation |  |  | 3,081 |  |  |  | 2,153 |
Excess tax benefits related to stock-based compensation |  |  | - |  |  |  | (3,672 | )
Foreign, state and provincial tax rate differential |  |  | (7,463 | ) |  |  | (2,402 | )
Settlement of long-term incentive arrangement |  |  | - |  |  |  | 83,310 |
Other taxes |  |  | - |  |  |  | (45 | )
Provision for income taxes as reported |  | $ | 35,865 |  |  | $ | 27,147 |
Earnings before income tax by jurisdiction comprise the following:
|  | 2020 |  | 2019
Canada |  | $ | 19,166 |  |  | $ | (323,100 | )
United States |  |  | 126,289 |  |  |  | 122,616 |
Total |  | $ | 145,455 |  |  | $ | (200,484 | )
Income tax expense (recovery) comprises the following:
|  | 2020 |  | 2019
Current |  |  |  |  |  |  |  |
Canada |  | $ | 3,300 |  |  | $ | 369 |
United States |  |  | 49,759 |  |  |  | 33,978 |
|  |  | 53,059 |  |  |  | 34,347 |
Deferred |  |  |  |  |  |  |  |
Canada |  |  | 1,350 |  |  |  | (1,620 | )
United States |  |  | (18,544 | ) |  |  | (5,580 | )
|  |  | (17,194 | ) |  |  | (7,200 | )
Total |  | $ | 35,865 |  |  | $ | 27,147 |
The significant components of deferred income tax are as follows:
|  | 2020 |  | 2019
Deferred income tax assets |  |  |  |  |  |  |  |
Loss carry-forwards |  | $ | 1,441 |  |  | $ | 2,788 |
Expenses not currently deductible |  |  | 39,415 |  |  |  | 23,283 |
Stock-based compensation |  |  | - |  |  |  | 749 |
Allowance for doubtful accounts |  |  | 5,535 |  |  |  | 3,860 |
Inventory and other reserves |  |  | 865 |  |  |  | 3,024 |
|  |  | 47,256 |  |  |  | 33,704 |
Deferred income tax liabilities |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 83,676 |  |  |  | 86,072 |
Basis differences of partnerships and other entities |  |  | 769 |  |  |  | 793 |
Prepaid and other expenses deducted for tax purposes |  |  | 1,505 |  |  |  | 1,276 |
|  |  | 85,950 |  |  |  | 88,141 |
Net deferred income tax asset (liability) before valuation allowance |  |  | (38,694 | ) |  |  | (54,437 | )
Valuation allowance |  |  | 603 |  |  |  | 965 |
Net deferred income tax asset (liability) |  | $ | (39,297 | ) |  | $ | (55,402 | )
The recoverability of deferred income tax assets is dependent on generating sufficient taxable income before the 20 year loss carry-forward limitation. Although realization is not assured, the Company believes it is more likely than not that the deferred tax asset will be realized. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carry-forward period are reduced. The Company has gross operating loss carry-forwards as follows:
|  | Loss carry forward |  | Gross losses not recognized |  | Net
|  | 2020 |  | 2019 |  | 2020 |  | 2019 |  | 2020 |  | 2019
Canada |  | $ | 1,364 |  |  | $ | 4,430 |  |  | $ | - |  |  | $ | - |  |  | $ | 1,364 |  |  | $ | 4,430 |
United States |  |  | 13,733 |  |  |  | 18,615 |  |  |  | 11,417 |  |  |  | 15,840 |  |  |  | 2,316 |  |  |  | 2,775 |
These amounts above are available to reduce future federal, state, and provincial income taxes in their respective jurisdictions. Net operating loss carry-forward balances attributable to the United States and Canada expire over the next 6 to 20 years. Cumulative unremitted earnings of US and foreign subsidiaries approximated $628,142 as at December 31, 2020 ( 2019 - $528,519 ). Income tax is not provided on the unremitted earnings of US and foreign subsidiaries because it has been the practice and is the intention of the Company to reinvest these earnings indefinitely in these subsidiaries. The gross unrecognized tax benefits are $148 ( 2019 - $148 ). Of this balance, $148 ( 2019 - $148 ) would affect the Company's effective tax rate if recognized. For the year ended December 31, 2020, there was no adjustment to interest and penalties related to provisions for income tax ( 2019 - nil ). As at December 31, 2020, the Company had accrued $38 ( 2019 - $38 ) for potential income tax related interest and penalties. The Company's significant tax jurisdictions include the United States and Canada. The number of years with open tax audits varies depending on the tax jurisdictions. Generally, income tax returns filed with the Canada Revenue Agency and related provinces are open for three to four years and income tax returns filed with the U.S. Internal Revenue Service and related states are open for three to five years. The Company does not currently expect any other material impact on earnings to result from the resolution of matters related to open taxation years, other than noted above. Actual settlements may differ from the amounts accrued. The Company has, as part of its analysis, made its current estimates based on facts and circumstances known to date and cannot predict changes in facts and circumstances that may affect its current estimates.

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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 http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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