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Income Taxes | 12 Months Ended
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Dec. 31, 2017
Income Taxes |
Income Taxes | Note 20—Income Taxes The components of the provision for income taxes are as follows (in thousands):
|  | 2017 |  | 2016 |  | 2015 |
Current provision (benefit) |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 21,509 |  | $ | 4,726 |  | $ | 26,948 |
State |  |  | 3,371 |  |  | 5,423 |  |  | 3,640 |
Foreign |  |  | (188) |  |  | 92 |  |  | 362 |
|  |  | 24,692 |  |  | 10,241 |  |  | 30,950 |
Deferred provision (benefit) |  |  |  |  |  |  |  |  |  |
Federal |  |  | 1,958 |  |  | 11,560 |  |  | (7,099) |
State |  |  | 1,219 |  |  | (727) |  |  | 155 |
Foreign |  |  | (36) |  |  | 72 |  |  | (60) |
|  |  | 3,141 |  |  | 10,905 |  |  | (7,004) |
Change in valuation allowance |  |  | 600 |  |  | — |  |  | — |
Total |  | $ | 28,433 |  | $ | 21,146 |  | $ | 23,946 |
A reconciliation of the U.S. statutory federal income tax rate related to pretax income to the effective tax rate for the periods indicated is as follows:
|  | 2017 |  | 2016 |  | 2015 |
U.S. federal statutory income tax rate |  | 35.0 % |  | 35.0 % |  | 35.0 % |
State taxes, net of federal income tax impact |  | 2.9 % |  | 6.4 % |  | 4.2 % |
Foreign tax credit |  | 0.0 % |  | (0.4)% |  | (0.5)% |
Canadian income tax (benefit) provision |  | (0.2)% |  | 0.4 % |  | 0.5 % |
Domestic production activities deduction |  | (2.3)% |  | (1.1)% |  | (3.9)% |
Nondeductible meals & entertainment |  | 2.8 % |  | 5.4 % |  | 5.1 % |
Other items |  | (0.7)% |  | (1.5)% |  | (1.0)% |
Effective tax rate excluding the impact of the Tax Act and income attributable to noncontrolling interests |  | 37.5 % |  | 44.2 % |  | 39.4 % |
Deferred tax liability remeasurement benefit from the Tax Act |  | (9.3)% |  | 0.0 % |  | 0.0 % |
Effective tax rate excluding income attributable to noncontrolling interests |  | 28.2 % |  | 44.2 % |  | 39.4 % |
Impact of income from noncontrolling interests on effective tax rate |  | (1.2)% |  | (0.9)% |  | (0.2)% |
Effective tax rate |  | 27.0 % |  | 43.3 % |  | 39.2 % |
Deferred taxes are recognized for temporary differences between the financial reporting bases and tax bases of assets and liabilities based on enacted tax rates expected to be in effect when such amounts are realized or settled. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based upon consideration of available evidence, including future reversals of existing taxable temporary differences, future projected taxable income, the length of the tax asset carryforward periods, and tax planning strategies. SAB 118 provides guidance on accounting for uncertainties of the effects of the Tax Act. Specifically, SAB 118 allows companies to record provisional estimates of the impact of the Tax Act during a one year “measurement period” similar to that used when accounting for business combinations. As a result of the Tax Act, we remeasured deferred tax assets and liabilities using the newly enacted tax rates and recorded a one-time net tax benefit of $9.4 million in the period ended December 31, 2017. This tax benefit is a provisional estimate that could be revised once we finalize our deductions for tax depreciation and executive compensation accruals. We may also revise our estimate based on any additional guidance issued by the U.S. Treasury Department, the U.S. Internal Revenue Service, and other standard-setting bodies. The tax effect of temporary differences that give rise to deferred income taxes for the years ended December 31, 2017 and 2016 are as follows (in thousands):
|  | 2017 |  | 2016 |
Deferred tax assets: |  |  |  |  |  |  |
Accrued compensation |  | $ | 3,323 |  | $ | 5,804 |
Accrued workers compensation |  |  | 6,197 |  |  | 9,855 |
Capital loss carryforward |  |  | — |  |  | 1,077 |
Foreign tax credit |  |  | 1,456 |  |  | 1,349 |
Insurance reserves |  |  | 2,544 |  |  | 3,248 |
Loss reserves |  |  | 2,215 |  |  | 4,841 |
Pension liability |  |  | — |  |  | 1,979 |
State income taxes |  |  | 2,233 |  |  | 2,011 |
Other |  |  | 202 |  |  | 288 |
Total deferred tax assets |  |  | 18,170 |  |  | 30,452 |
Deferred tax liabilities |  |  |  |  |  |  |
Depreciation and amortization |  |  | (30,555) |  |  | (38,327) |
Prepaid expenses and other |  |  | (586) |  |  | (1,955) |
Total deferred tax liabilities |  |  | (31,141) |  |  | (40,282) |
Valuation allowance |  |  | (600) |  |  | — |
Net deferred tax liabilities |  | $ | (13,571) |  | $ | (9,830) |
As of December 31, 2017, the tax effects of state net operating loss carryforwards were $0.8 million, state tax credit carryforwards were $1.1 million, and foreign tax credit carryforwards were $1.5 million. These carryforwards will begin to expire in 2021, 2025, and 2019, respectively. We determined it is more likely than not that a portion of our deferred tax asset related to foreign tax credits will be not be realized; a valuation allowance of $0.6 million was recorded. A reconciliation of the beginning and ending and aggregate changes in the gross balances of unrecognized tax benefits for each period is as follows (in thousands):
|  | 2017 |  | 2016 |  | 2015 |
Beginning balance |  | $ | — |  | $ | — |  | $ | 456 |
Increases in balances for tax positions taken during the current year |  |  | 592 |  |  | — |  |  | — |
Increases in balances for tax positions taken during prior years |  |  | — |  |  | — |  |  | — |
Settlements and effective settlements with tax authorities |  |  | — |  |  | — |  |  | (456) |
Lapse of statute of limitations |  |  | — |  |  | — |  |  | — |
Total |  | $ | 592 |  | $ | — |  | $ | — |
We recognize accrued interest and penalties related to uncertain tax positions in income tax expense, which were not material for the three years presented. We believe it is reasonably possible that decreases between $0 and $0.1 million of unrecognized tax benefits could occur in the next twelve months due to the expiration of statutes of limitation. Our federal income tax returns are generally no longer subject to examination for tax years before 2014. The statutes of limitation of state and foreign jurisdictions generally vary between 3 to 5 years. Accordingly, the tax years 2012 through 2016 remain open to examination by the other taxing jurisdictions in which we operate.

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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 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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