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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES Income Tax Provision The components of income from continuing operations before income taxes, including equity in unconsolidated affiliates, were as follows:
| Year ended December 31,
| 2020 |  | 2019 |  | 2018
Domestic | $ | 528 |  |  | $ | 18 |  |  | $ | 359 |
Foreign | 93 |  |  | (41) |  |  | 162 |
Total | $ | 621 |  |  | $ | (23) |  |  | $ | 521 |
The following presents the components of our income tax provision (benefit) from continuing operations.
| Year ended December 31,
| 2020 |  | 2019 |  | 2018
Current tax provision (benefit): |  |  |  |  |
U.S. federal | $ | 79 |  |  | $ | (5) |  |  | $ | 55 |
State and local | 17 |  |  | (1) |  |  | 8 |
Foreign | 27 |  |  | (17) |  |  | 32 |
Net current tax provision (benefit) | 123 |  |  | (23) |  |  | 95 |
Deferred tax provision (benefit): |  |  |  |  |
U.S. federal | (3) |  |  | 7 |  |  | 11 |
State and local | 8 |  |  | (1) |  |  | 6 |
Foreign | (2) |  |  | 5 |  |  | 11 |
Net valuation allowance increase (decrease) | (1) |  |  | (1) |  |  | (1) |
Net deferred tax provision | 2 |  |  | 10 |  |  | 27 |
Total income tax provision (benefit) | $ | 125 |  |  | $ | (13) |  |  | $ | 122 |
We paid income taxes, net of refunds, of $70 million, $20 million, and $90 million during 2020, 2019, and 2018, respectively. Included in our Consolidated Balance Sheets at December 31, 2020, is a net income tax payable of $15 million, and at December 31, 2019, we had a net income tax receivable of $35 million. Deferred Taxes The tax effects of significant temporary differences creating deferred tax assets and liabilities were as follows:
| December 31,
| 2020 |  | 2019
Accrued liabilities | $ | 23 |  |  | $ | 18 |
Pension and post-retirement benefits | 5 |  |  | 7 |
Share-based compensation | 4 |  |  | 5 |
Benefit relating to capital loss, NOL carryforwards, and credit carryforwards | 9 |  |  | 28 |
Inventories | 7 |  |  | 7 |
Market value write-down of ARS | — |  |  | 3 |
Operating lease liabilities | 5 |  |  | 6 |
Other | 12 |  |  | 8 |
Total deferred tax assets | 65 |  |  | 82 |
Valuation allowance | (10) |  |  | (11) |
Total deferred tax asset after valuation allowance | 55 |  |  | 71 |
Property, plant, and equipment | (109) |  |  | (121) |
Timber and timberlands | (9) |  |  | (10) |
Operating lease assets | (5) |  |  | (6) |
Investment in Entekra | (7) |  |  | (6) |
Total deferred tax liabilities | (130) |  |  | (143) |
Net deferred tax liabilities | (75) |  |  | (72) |
Balance sheet classification |  |  |
Long-term deferred tax asset | 3 |  |  | 1 |
Long-term deferred tax liability | (78) |  |  | (73) |
| $ | (75) |  |  | $ | (72) |
The benefit relating to capital loss, net operating loss (NOL) and credit carryforwards included in the above table at December 31, 2020 consists of:
| Net Operating Loss | Benefit Amount | Valuation Allowance | Expiration Beginning in
State NOL carryforwards | 109 |  | $ | 2 |  | $ | — |  | 2021
Chile NOL carryforwards | 4 |  | 1 |  | — |  | No expiration
State credit carryforwards |  | 1 |  | — |  | 2034
Canadian capital loss carryforwards |  | 5 |  | (5) |  | No expiration
Canadian credit carryforwards |  | 1 |  | — |  | 2024
|  | $ | 10 |  | $ | (5) |  |
We periodically review the need for valuation allowances against deferred tax assets and recognize these deferred tax assets to the extent that their realization is more likely than not. As part of our review, we consider all positive and negative evidence, including earnings history, the future reversal of deferred tax liabilities, and the relevant expirations of carryforwards. We believe that the valuation allowances provided are appropriate. If future years’ earnings differ from the estimates used to establish these valuation allowances, or other objective positive or negative evidence arises, we may be required to record an adjustment to the valuation allowance resulting in an impact on tax provision (benefit) for that period. As of December 31, 2020, certain of our foreign subsidiaries had accumulated undistributed earnings of approximately $143 million. These earnings have been, and are intended to be, indefinitely reinvested in our foreign operations, and we expect future U.S. cash generation to be sufficient to meet our future U.S. cash needs. As a result, no deferred taxes have been recorded with respect to the difference between the financial accounting value and the tax basis in these subsidiaries. Since most of these earnings have previously been subject to the one-time U.S. transition tax on foreign earnings required by the 2017 Tax Cuts and Jobs Act, they are eligible to be repatriated without additional U.S. tax. Any additional taxes due with respect to such earnings, if repatriated to the U.S., would generally be limited to foreign withholding taxes, which we estimate could be up to $26 million. Tax Rate Reconciliation The following table summarizes the differences between the U.S. federal statutory tax rates and the total effective tax rates from continuing operations:
| Year ended December 31,
| 2020 |  | 2019 |  | 2018
Income from continuing operations before income taxes, including equity in unconsolidated affiliates | $ | 621 |  |  | $ | (23) |  |  | $ | 524 |
U.S. federal tax rate | 21 | % |  | 21 | % |  | 21 | %
State and local income taxes | 3 |  |  | 11 |  |  | 3 |
Effect of foreign tax rates | 1 |  |  | 9 |  |  | 2 |
Effect of foreign exchange on functional currencies | — |  |  | (4) |  |  | (1) |
Tax credits | (1) |  |  | 8 |  |  | (1) |
Noncontrolling interest | — |  |  | (4) |  |  | — |
Stock-based compensation | — |  |  | 5 |  |  | (1) |
Capital gain tax rate differential | — |  |  | 5 |  |  | — |
Inflationary adjustment | — |  |  | 5 |  |  | — |
Valuation allowance | — |  |  | 8 |  |  | — |
Uncertain tax positions | (4) |  |  | (7) |  |  | — |
Effect of U.S. federal rate change on deferred taxes | — |  |  | — |  |  | (1) |
Other, net | — |  |  | 1 |  |  | 1 |
Effective tax rate (%) | 20 | % |  | 58 | % |  | 23 | %
We are subject to U.S. federal income tax as well as income taxes of multiple state jurisdictions. Our foreign subsidiaries are subject to income tax in Canada, Chile, Brazil, Peru, Colombia, and Argentina. We generally remain subject to U.S. federal and state examinations for tax years 2017 and subsequent. In addition to the U.S., we have tax years that remain open and subject to examination by tax authorities in the following major tax jurisdictions: Brazil and Chile for tax years 2015 and subsequent and Canada for tax years 2016 and subsequent. Our tax returns are currently under examination by tax authorities in Canada for years 2017 and 2018 and in Chile for years 2016 through 2018. Under U.S. GAAP, we are allowed to make an accounting policy election relating to the inclusion of Global Intangible Low-Taxed Income (GILTI) to treat taxes due on future U.S. income inclusions in taxable income related to GILTI as either (1) a current period expense (the period cost method) or (2) factoring in such amounts into our measurement of deferred taxes (the deferred method). We have elected to treat taxes due on future U.S. inclusions in taxable income related to GILTI as a current period expense when incurred using the period cost method. Uncertain Tax Positions In accordance with the accounting for uncertain tax positions, the following is a tabular reconciliation of the total amount of unrecognized tax benefits at the beginning and end of the years presented:
| December 31,
| 2020 |  | 2019 |  | 2018
Beginning balance | $ | 38 |  |  | $ | 41 |  |  | $ | 40 |
Increases: |  |  |  |  |
Tax positions taken in current year | 1 |  |  | 1 |  |  | 1 |
Tax positions taken in prior years | 1 |  |  | — |  |  | 1 |
Decreases: |  |  |  |  |
Tax positions taken in current year | — |  |  | — |  |  | — |
Tax positions taken in prior years | — |  |  | — |  |  | — |
Settlements during the year | — |  |  | (4) |  |  | (1) |
Lapse of statute in current year | (29) |  |  | — |  |  | — |
Ending balance | $ | 11 |  |  | $ | 38 |  |  | $ | 41 |
Included in the above balances at December 31, 2020, is $11 million of tax benefits that, if recognized, would affect our effective tax rate. We accrued and paid no interest during 2020 and accrued $1 million interest and paid $2 million interest during 2019. Included in our Consolidated Balance Sheets at December 31, 2019, was a $2 million liability for accrued interest. After the statute of limitations lapsed in 2020, we reversed the liability for accrued interest and had no remaining interest accrued as of December 31, 2020.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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