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Income Taxes
 12 Months Ended
Dec. 31, 2020
Income Tax Disclosure [Abstract]  
Income Taxes
13.INCOME TAXES
Provision for Income Taxes
The Company and its subsidiaries are based in the U.S. and file federal and various state income tax returns. The components of the provision for income taxes were as follows:
Years Ended December 31,
202020192018
Current tax expense$3,032 $1,182 $288 
Deferred tax (benefit) expense19,439 (27,398)1,450 
Income tax (benefit) expense$22,471 $(26,216)$1,738 
Due to the net operating loss carryforwards, the Company expects no cash payments for federal tax income taxes for expense for 2020 and 2019. The Company makes cash payments for state income taxes in states in which the Company does not have net operating loss carry forwards.
Effective Tax Rate
The items comprising the difference between income taxes computed at the U.S. federal statutory rates in effect for 2020, 2019 and 2018 and our effective tax rates were as follows:
Years Ended December 31,
202020192018
Amount%Amount%Amount%
Tax expense at the U.S. federal statutory rate$13,729 21.0 %$3,041 21.0 %$6,568 21.0 %
State income taxes, net of federal benefits5,149 7.9 %1,670 11.5 %364 1.2 %
Taxes on subsidiaries’ and joint ventures’ earnings allocated to noncontrolling interests owners(141)(0.2)%(2,241)(15.5)%(4,097)(13.1)%
Valuation allowance— — %(29,375)(202.9)%(1,013)(3.2)%
Executive compensation, including stock incentives1,881 2.9 %805 5.6 %26 0.1 %
Other permanent differences1,853 2.8 %(116)(0.8)%(110)(0.4)%
Income tax (benefit) expense$22,471 34.4 %$(26,216)(181.1)%$1,738 5.6 %
The 2020 effective income tax rate varied from the statutory rate primarily as a result of state income taxes, nondeductible compensation and other permanent differences. The decrease from the U.S. federal statutory rate in 2019 was primarily a result of the reversal of the valuation allowance on our net deferred tax assets. The 2018 effective income tax rate varied from the statutory rate primarily as a result of a change in the valuation allowance on our net deferred tax assets exclusive of deferred tax liabilities on indefinite lived assets and net income attributable to noncontrolling interest owners, which is taxable to those owners rather than the Company. 
Deferred Tax Assets and Liabilities
The components of deferred tax assets and liabilities were as follows:
Long Term
As of December 31,
20202019
Assets related to:
Accrued compensation and other$4,743 $3,981 
Noncontrolling interests1,860 1,812 
Deferred revenue— 922 
Members interest liabilities9,131 11,328 
Right of use liabilities3,687 3,253 
Derivative Liability1,557 — 
Deferred Payments2,223 — 
Net operating loss carryforwards14,316 19,801 
Total deferred tax assets37,517 41,097 
Liabilities related to:
Depreciation of property and equipment(16,490)(7,911)
Right of use assets(3,680)(3,232)
Amortization of tax basis goodwill(7,099)(3,091)
Other(2,431)(851)
Total deferred tax liabilities$(29,700)$(15,085)
Net total deferred tax asset$7,817 $26,012 
Net Operating Loss—At December 31, 2020 the Company had federal and state net operating loss (“NOL”) carryforwards of $58,719 and $36,381, respectively, which expire at various dates in the next 18 years for U.S. federal income tax and in the next 8 to 18 years for the various state jurisdictions where we operate. Such NOL carryforwards expire beginning in 2028 through 2039.
Valuation Allowance—The Company performs an analysis at the end of each reporting period to determine whether it is more likely than not deferred tax assets will be realized in future years. In performing its assessments in prior periods, a full valuation allowance was recorded as a result of objective negative evidence which included historical losses from 2013 to 2016 and the first quarter of 2017 and associated limits on ability to consider other subjective evidence such as projections for future growth. During 2019, the Company achieved eleven of the last twelve consecutive quarters of pre-tax income and is projecting sufficient future taxable income to be available to utilize all NOLs prior to their expiration. Deferred tax liabilities were a consideration in the analysis of whether to apply a valuation allowance because taxable temporary differences may be used as a source of taxable income to support the realization of deferred tax assets. A deferred tax liability that relates to an asset with an indefinite life, such as goodwill, may not be considered a source of income and should not be netted against deferred tax assets for valuation allowance purposes. As a result of this analysis, the Company believed that there was sufficient positive evidence that outweighed any negative evidence and therefore released the full valuation allowance in the fourth quarter of 2019.
Uncertain Tax Positions
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 U.S. federal income tax returns for 2018 and later years are open and subject to examination by the I.R.S. In addition, the Company’s state income tax returns for 2017 and later years are open and subject to examination. Additionally, federal and state NOLs may be adjusted by the taxing authorities for the 2013 and later tax years.