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Note 13 - Income Taxes | 12 Months Ended
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Dec. 31, 2023
Notes to Financial Statements |
Income Tax Disclosure [Text Block] |
13. | INCOME TAXES:
The tax provisions are summarized as follows (in thousands):
|  | Year Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Income before income taxes: |  |  |  |  |  |  |  |  |  |  |  |
Domestic |  | $ | 455,288 |  |  | $ | 502,141 |  |  | $ | 307,260 |
Foreign |  |  | 6,773 |  |  |  | 7,186 |  |  |  | 6,423 |
Total |  |  | 462,061 |  |  |  | 509,327 |  |  |  | 313,683 |
Current provision |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 87,270 |  |  | $ | 93,942 |  |  | $ | 47,475 |
State |  |  | 16,864 |  |  |  | 16,516 |  |  |  | 10,759 |
Foreign |  |  | 2,265 |  |  |  | 2,523 |  |  |  | - |
Total |  |  | 106,399 |  |  |  | 112,981 |  |  |  | 58,234 |
Deferred provision (benefit) |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 7,617 |  |  |  | 7,975 |  |  |  | 13,809 |
State |  |  | 505 |  |  |  | (565 | ) |  |  | (631 | )
Foreign |  |  | (521 | ) |  |  | (3,149 | ) |  |  | 856 |
Total |  |  | 7,601 |  |  |  | 4,261 |  |  |  | 14,034 |
Provision for income taxes |  | $ | 114,000 |  |  | $ | 117,242 |  |  | $ | 72,268 |
A reconciliation of taxes based on the federal statutory rates and the provisions (benefits) for income taxes are summarized as follows (in thousands):
|  | Year Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
|  | Amount |  |  | Rate |  |  | Amount |  |  | Rate |  |  | Amount |  |  | Rate |
Income taxes at the federal statutory rate |  | $ | 97,032 |  |  |  | 21.0 | % |  | $ | 106,959 |  |  |  | 21.0 | % |  | $ | 65,694 |  |  |  | 21.0 | %
State income taxes, net of federal benefit (a) |  |  | 14,120 |  |  |  | 3.1 |  |  |  | 12,708 |  |  |  | 2.5 |  |  |  | 7,874 |  |  |  | 2.5 |
Tax effect of permanent differences |  |  | 1,357 |  |  |  | 0.3 |  |  |  | (488 | ) |  |  | (0.1 | ) |  |  | (2502 | ) |  |  | (0.8 | )
Foreign tax rate differential |  |  | 266 |  |  |  | 0.0 |  |  |  | (2134 | ) |  |  | (0.4 | ) |  |  | (313 | ) |  |  | (0.1 | )
Other, net |  |  | 1,225 |  |  |  | 0.3 |  |  |  | 197 |  |  |  | 0.0 |  |  |  | 1,515 |  |  |  | 0.5 |
Provision for income taxes |  | $ | 114,000 |  |  |  | 24.7 | % |  | $ | 117,242 |  |  |  | 23.0 | % |  | $ | 72,268 |  |  |  | 23.1 | %
(a) State taxes in Texas, California and Illinois made up the majority (greater than 50 percent) of the tax effect in this category The following summarizes the components of net deferred income tax liabilities included in the balance sheet (in thousands):
|  | December 31, |
|  | 2023 |  |  | 2022 |
Deferred income tax (assets) liabilities: |  |  |  |  |  |  |  |
Inventory |  | $ | (5,215 | ) |  | $ | (4,710 | )
Accounts receivable |  |  | (436 | ) |  |  | (430 | )
Vehicle finance lease obligations |  |  | (31,178 | ) |  |  | (28,514 | )
Finance and operating leases - Liability |  |  | (29,446 | ) |  |  | (25,283 | )
Stock options |  |  | (8,785 | ) |  |  | (7,525 | )
Accrued liabilities |  |  | (4,653 | ) |  |  | (3,632 | )
State net operating loss carry forward |  |  | (1,111 | ) |  |  | (1,268 | )
State tax credit |  |  | (34 | ) |  |  | (77 | )
Other |  |  | (6,167 | ) |  |  | (5,519 | )
Finance and operating leases - Asset |  |  | 29,031 |  |  |  | 24,989 |
Fixed assets and intangibles |  |  | 217,565 |  |  |  | 203,939 |
Net deferred income tax liability |  | $ | 159,571 |  |  | $ | 151,970 |
As of December 31, 2023, the Company had approximately $26.9 million in state net operating loss carry forwards that expire from 2023 to 2042, which result in a deferred tax asset of approximately $1.1 million. The Company has concluded that its state net operating losses are more likely than not to be realized and has not recorded a valuation allowance against them. The Company had unrecognized income tax benefits totaling $6.7 million as a component of accrued liabilities as of December 31, 2023, and $5.3 million as of December 31, 2022, the total of which, if recognized, would impact the Company’s effective tax rate. An unfavorable settlement would require a charge to income tax expense and a favorable resolution would be recognized as a reduction to income tax expense. The Company recognizes interest accrued related to unrecognized tax benefits in income tax expense. During the years ended December 31, 2023, 2022 and 2021, the Company recognized approximately $86,200, $86,200, and $129,660 in interest expense. No amounts were accrued for penalties. The Company had approximately $389,000, $389,000 and $279,000 of interest accrued as of December 31, 2023, 2022 and 2021, respectively. Undistributed earnings of certain of the Company’s foreign subsidiaries amounted to approximately $22.9 million at December 2023 and $18.9 million at December 2022. Those earnings are considered to be indefinitely reinvested. Upon repatriation of those earnings in the form of dividends or otherwise, the Company may be subject to state and local taxes, and/or withholding taxes payable to the various foreign countries. The Company expects to be able to take a 100% dividends received deduction to offset any U.S. federal income tax liability on the distribution of untaxed earnings and profits. The Company does not anticipate a significant change in the amount of unrecognized tax benefits in the next 12 months. As of December 31, 2023, the tax years ended December 31, 2020 through 2023 remained subject to audit by federal tax authorities and the tax years ended December 31, 2019 through 2023, remained subject to audit by state tax authorities. The table below presents the reconciliation of the change in the unrecognized tax benefits (in thousands):
|  | 2023 |  |  | 2022 |  |  | 2021 |
Unrecognized tax benefits at beginning of period |  | $ | 5,377 |  |  | $ | 4,309 |  |  | $ | 3,306 |
Gross increases – tax positions in current year |  |  | 2,582 |  |  |  | 2,025 |  |  |  | 1,512 |
Reductions due to lapse of statute of limitations |  |  | (1,188 | ) |  |  | (957 | ) |  |  | (509 | )
Unrecognized tax benefits at end of period |  | $ | 6,771 |  |  | $ | 5,377 |  |  | $ | 4,309 |

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