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Note 12 - Income Taxes and Deferred Tax Asset/Liability | 12 Months Ended
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Dec. 31, 2016
Notes to Financial Statements |
Income Tax Disclosure [Text Block] |
12. | Income Taxes and Deferred Tax Asset/Liability
The Company and its subsidiaries file U.S. federal and various U.S. state income tax returns. Current income tax expense (or benefit) represents federal and state taxes based on tax paid or expected to be payable or receivable for the periods shown in the consolidated statements of operations. We have federal and state NOL carryforwards of $112.9 million and $56.1 million, respectively, which will expire at various dates in the next 20 years for U.S. federal income tax and in the next 5 to 20 years for the various state jurisdictions where we operate. Such NOL carryforwards expire as follows (in thousands):
| Year |  | Amount |
| 2020 |  | $ | 15 |  |
| 2021 |  |  | 5 |  |
| 2028 |  |  | 8,745 |  |
| 2029 |  |  | 3,480 |  |
| 2033 |  |  | 72,046 |  |
| 2034 |  |  | 41,433 |  |
| 2035 |  |  | 30,635 |  |
| 2036 |  |  | 12,686 |  |
| Total |  | $ | 169,045 |  |
Current income tax expense represents federal and state income tax paid or expected to be payable for the years shown in the consolidated statements of operations. The income tax expense in the accompanying consolidated financial statements consists of the following (amounts in thousands):
|  | Years Ended December 31,
|  | 2016 |  | 2015 |  | 2014
Current tax expense |  | $ | 88 |  |  | $ | 7 |  |  | $ | 632 |
Deferred tax expense |  |  | -- |  |  |  | -- |  |  |  | -- |
Total tax expense |  | $ | 88 |  |  | $ | 7 |  |  | $ | 632 |
The effective income tax rate varied from the statutory rate primarily as a result of the change in the valuation allowance, net income attributable to noncontrolling interest owners, which is taxable to those owners rather than to the Company, state income taxes and other permanent differences. The income tax provision differs from the amount using the statutory federal income tax rate of 35% for the following reasons (amounts in thousands):
|  | Years Ended December 31,
|  | 2016 |  | 2015 |  | 2014
|  | Amount |  | % |  | Amount |  | % |  | Amount |  | %
Tax benefit at the U.S. federal statutory rate |  | $ | (2,563 | ) |  |  | 35.0 | % |  | $ | (6,013 | ) |  |  | 35.0 | % |  | $ | (1,608 | ) |  |  | 35.0 | %
State tax based on income, net of refunds and federal benefits |  |  | (113 | ) |  |  | 1.5 |  |  |  | (860 | ) |  |  | 5.0 |  |  |  | (155 | ) |  |  | 3.4 |
Taxes on subsidiaries’ and joint ventures’ earnings allocated to noncontrolling interests owners |  |  | (3,786 | ) |  |  | 51.7 |  |  |  | (2,620 | ) |  |  | 15.3 |  |  |  | (2,365 | ) |  |  | 51.5 |
Valuation allowance |  |  | 6,919 |  |  |  | (94.5 | ) |  |  | 10,036 |  |  |  | (58.4 | ) |  |  | 4,152 |  |  |  | (90.4 | )
Tax credits |  |  | (1,258 | ) |  |  | 17.2 |  |  |  | (551 | ) |  |  | 3.2 |  |  |  | -- |  |  |  | -- |
Reduction of tax receivable |  |  | -- |  |  |  | -- |  |  |  | -- |  |  |  | -- |  |  |  | 524 |  |  |  | (11.4 | )
Return to provision |  |  | 400 |  |  |  | (5.5 | ) |  |  | -- |  |  |  | -- |  |  |  | -- |  |  |  | -- |
Earn-out liability |  |  | 433 |  |  |  | (5.9 | ) |  |  | -- |  |  |  | -- |  |  |  | -- |  |  |  | -- |
Other permanent differences |  |  | 56 |  |  |  | (0.8 | ) |  |  | 15 |  |  |  | (0.1 | ) |  |  | 84 |  |  |  | (1.9 | )
Income tax expense |  | $ | 88 |  |  |  | (1.3 | )% |  | $ | 7 |  |  |  | -- | % |  | $ | 632 |  |  |  | (13.8 | )%
Deferred tax assets and liabilities consist of the following (amounts in thousands):
|  | Long Term
|  | As of December 31,
|  | 2016 |  | 2015
Assets related to: |  |  |  |  |  |  |  |
Accrued compensation and other |  | $ | 4,490 |  |  | $ | 2,084 |
Goodwill |  |  | 3,909 |  |  |  | 6,705 |
Noncontrolling interest |  |  | 2,085 |  |  |  | 2,247 |
Deferred revenue |  |  | 482 |  |  |  | 688 |
Revaluation of put/call liabilities |  |  | 16,620 |  |  |  | 18,638 |
Net operating loss carryforwards |  |  | 41,942 |  |  |  | 39,317 |
Valuation allowance for deferred tax assets |  |  | (58,034 | ) |  |  | (56,399 | )
Liabilities related to: |  |  |  |  |  |  |  |
Depreciation of property and equipment |  |  | (11,471 | ) |  |  | (11,766 | )
Receivables from and equity in construction joint ventures |  |  | -- |  |  |  | (1,494 | )
Other |  |  | (23 | ) |  |  | (20 | )
Net asset |  | $ | -- |  |  | $ | -- |
Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three -year period ended December 31, 2016. The cumulative three -year period loss that remained at December 31, 2016 was the result of write-downs recorded during the past three years. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future growth. On the basis of this evaluation, as of December 31, 2016, a valuation allowance of $58.0 million was recorded on the net deferred tax assets including federal and state net operating losses as they are not likely to be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted in the future if objective negative evidence or cumulative losses are no longer present and additional weight may be given to subjective evidence such as our projections for growth. If our assumptions change and we determine we will be able to realize these deferred tax assets, the tax benefits relating to any reversal of the valuation allowance on deferred tax assets as of December 31, 2016, will be accounted for as follows: approximately $48.3 million will be recognized as a reduction of income tax expense and $9.7 million will be recorded as an increase in equity. As a result of the Company’s analysis, management has determined that the Company does not have any material uncertain tax positions. The Company’s policy is to recognize interest related to any underpayment of taxes as interest expense and penalties as administrative expenses. No interest or penalties have been accrued at December 31, 2016 or 2015. The Company’s U.S. federal income tax returns for 2013 and later years are open and subject to examination by the I.R.S. In addition, the Company’s state income tax returns for 2012 and later years are open and subject to examination.

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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 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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