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Income Taxes | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES The operations conducted by the Company’s REIT entities are generally not subject to U.S. federal and state income taxation. The New Zealand JV is subject to corporate level tax in New Zealand. Non-REIT qualifying operations are conducted by the Company’s taxable REIT subsidiaries. Prior to the June 27, 2014 spin-off of Rayonier Advanced Materials, the Company’s taxable REIT subsidiaries (“TRS”) operations included the Performance Fibers manufacturing business. During 2014 and 2013, the income tax benefit from continuing operations was significantly impacted by the TRS businesses. During 2016 and 2015, the primary businesses performed in Rayonier’s taxable REIT subsidiaries included log trading and certain real estate activities, such as the sale and entitlement of development HBU properties. The Company was subject to U.S. federal corporate income tax on built-in gains (the excess of fair market value over tax basis for property held upon REIT election at January 1, 2004) on taxable sales of such property during calendar years 2004 through 2013. In 2013, the law provided a built-in gains tax holiday, which impacted the Company’s 2013 tax provision. Alternative Fuel Mixture Credit (“AFMC”) and Cellulosic Biofuel Producer Credit (“CBPC”) The U.S. Internal Revenue Code allowed two credits for taxpayers that produced and used an alternative fuel in the operation of their business during calendar year 2009. The AFMC is a $0.50 per gallon refundable excise tax credit (which is not taxable), while the CBPC is a $1.01 per gallon credit that is nonrefundable, taxable and has limitations based on an entity’s tax liability. Rayonier produced and used an alternative fuel (“black liquor”) in its Performance Fibers business, which qualified for both credits. The Company claimed the AFMC on its original 2009 income tax return. In 2013, management approved an exchange of black liquor gallons previously claimed under the AFMC for the CBPC. The net tax benefit from this exchange of $18.8 million was recorded in discontinued operations. As a result of the spin-off of the Performance Fibers business in 2014, the Company recorded a $13.6 million valuation allowance in continuing operations related to CPBC remaining with the Company’s taxable REIT subsidiary and the limited potential use of the CBPC prior to its expiration on December 31, 2019. In 2015, a $1.0 million return-to-accrual adjustment was recorded related to the CBPC which resulted in a corresponding increase in the CBPC valuation allowance to $14.6 million. Provision for Income Taxes from Continuing Operations The (provision for)/benefit from income taxes consisted of the following:
| 2016 |  | 2015 |  | 2014
Current |  |  |  |  |
U.S. federal | — |  |  |  | ($624 | ) |  |  | $27,521 |
State | (254 | ) |  | 226 |  |  | 1,353 |
Foreign | (241 | ) |  | (308 | ) |  | — |
| (495 | ) |  | (706 | ) |  | 28,874 |
Deferred |  |  |  |  |
U.S. federal | 5,403 |  |  | 3,702 |  |  | (7,260 | )
State | (280 | ) |  | 107 |  |  | (357 | )
Foreign | (6,079 | ) |  | 2,360 |  |  | 1,633 |
| (956 | ) |  | 6,169 |  |  | (5,984 | )
Changes in valuation allowance | (3,613 | ) |  | (4,604 | ) |  | (13,289 | )
Total |  | ($5,064 | ) |  |  | $859 |  |  |  | $9,601 |
A reconciliation of the U.S. federal statutory income tax rate to the actual income tax rate was as follows:
|  | 2016 |  | 2015 |  | 2014
U.S. federal statutory income tax rate |  |  | ($77,992 | ) |  | 35.0 | % |  |  | ($15,079 | ) |  | 35.0 | % |  |  | ($15,695 | ) |  | 35.0 | %
U.S. and foreign REIT income and U.S. TRS taxable losses |  | 72,507 |  |  | (32.5 | ) |  | 19,446 |  |  | (45.1 | ) |  | 32,058 |  |  | (71.5 | )
Foreign TRS operations |  | 1,098 |  |  | (0.5 | ) |  | 1,097 |  |  | (2.6 | ) |  | (159 | ) |  | 0.4 |
U.S. net deferred tax asset valuation allowance |  | (3,613 | ) |  | 1.6 |  |  | (3,607 | ) |  | 8.4 |  |  | — |  |  | — |
CBPC valuation allowance |  | — |  |  | — |  |  | (997 | ) |  | 2.3 |  |  | (13,644 | ) |  | 30.4 |
Deferred tax inventory valuations |  | — |  |  | — |  |  | — |  |  | — |  |  | 5,151 |  |  | (11.5 | )
Uncertain tax positions |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,830 |  |  | (4.1 | )
Other |  | 2,936 |  |  | (1.3 | ) |  | (1 | ) |  | — |  |  | 60 |  |  | (0.1 | )
Income tax (expense) benefit as reported for continuing operations |  |  | ($5,064 | ) |  | 2.3 | % |  | 859 |  |  | (2.0 | )% |  |  | $9,601 |  |  | (21.4 | )%
The Company’s effective tax rate is below the 35 percent U.S. statutory rate primarily due to tax benefits associated with being a REIT. Provision for Income Taxes from Discontinued Operations On June 27, 2014 Rayonier completed the spin-off of its Performance Fibers business. Income tax expense related to Performance Fibers discontinued operations was $20.6 million for the year ended December 31, 2014. See Note 23 — Discontinued Operations for additional information on the spin-off of the Performance Fibers business. Deferred Taxes Deferred income taxes result from recording revenues and expenses in different periods for financial reporting versus tax reporting. The nature of the temporary differences and the resulting net deferred tax asset/liability for the two years ended December 31, were as follows:
| 2016 |  | 2015
Gross deferred tax assets: |  |  |
Pension, postretirement and other employee benefits |  | $1,648 |  |  |  | $1,040 |
New Zealand JV | 60,452 |  |  | 65,078 |
CBPC Tax Credit Carry Forwards (a) | 14,641 |  |  | 14,641 |
Capitalized real estate costs | 11,489 |  |  | 9,378 |
U.S. TRS Net Operating Loss | 4,730 |  |  | 2,327 |
Other | 9,165 |  |  | 7,050 |
Total gross deferred tax assets | 102,125 |  |  | 99,514 |
Less: Valuation allowance | (21,861 | ) |  | (18,248 | )
Total deferred tax assets after valuation allowance |  | $80,264 |  |  |  | $81,266 |
Gross deferred tax liabilities: |  |  |
Accelerated depreciation | (1,322 | ) |  | (1,357 | )
Repatriation of foreign earnings | (7,368 | ) |  | (7,251 | )
New Zealand JV | (70,315 | ) |  | (68,551 | )
Timber installment sale | (7,601 | ) |  | (7,511 | )
Other | (3,833 | ) |  | (311 | )
Total gross deferred tax liabilities | (90,439 | ) |  | (84,981 | )
Net deferred tax (liability)/asset reported as noncurrent |  | ($10,175 | ) |  |  | ($3,715 | )
(a) | In 2015, a $1.0 million return to accrual adjustment was made in conjunction with the filing of the Company’s 2014 U.S. federal income tax return.
Included above are the following foreign net operating loss (“NOL”) and tax credit carryforwards as of December 31, 2016:
| Gross Amount |  | Valuation Allowance |  | Expiration
2016 |  |  |  |  |
New Zealand JV NOL Carryforwards |  | $215,898 |  |  | — |  | None
U.S. Net Deferred Tax Asset | 7,220 |  |  | (7,220 | ) |  | None
Cellulosic Biofuel Producer Credit (a) | 14,641 |  |  | (14,641 | ) |  | 2019
Total Valuation Allowance |  |  |  | ($21,861 | ) |  |
2015 |  |  |  |  |
New Zealand JV NOL Carryforwards |  | $232,846 |  |  | — |  | None
U.S. Net Deferred Tax Asset | 3,607 |  |  | (3,607 | ) |  | None
Cellulosic Biofuel Producer Credit (a) | 14,641 |  |  | (14,641 | ) |  | 2019
Total Valuation Allowance |  |  |  | ($18,248 | ) |  |
(a) | In 2015, a $1.0 million return to accrual adjustment was made in conjunction with the filing of the Company’s 2014 U.S. federal income tax return.
Prepaid Taxes As of December 31, 2016 and 2015, the Company has recorded a long-term prepaid federal income tax of $14.4 million related to recognized built-in gains on 2006, 2008 and 2010 intercompany sales of timberlands between the REIT and the TRS. Taxes for the transactions were paid at the time of sale, but the gain and income tax expense were deferred in accordance with U.S. Generally Accepted Accounting Principles. As the timberlands are sold to third parties, the appropriate gain and related income tax expense will be recognized and the prepaid income tax will be reduced. Other Tax Items In 2015 and 2014, the Company recorded tax deficiencies on stock-based compensation of $0.3 million and $0.8 million, respectively. These amounts were recorded directly to shareholders’ equity and were not included in the consolidated tax provision. Unrecognized Tax Benefits In accordance with Generally Accepted Accounting Principles, the Company recognizes the impact of a tax position if a position is “more-likely-than-not” to prevail. A reconciliation of the beginning and ending unrecognized tax benefits for the three years ended December 31 is as follows:
| 2016 |  | 2015 |  | 2014
Balance at January 1, |  | $135 |  |  | — |  |  |  | $10,547 |
Decreases related to prior year tax positions | — |  |  | — |  |  | (10,547 | )
Increases related to prior year tax positions | — |  |  | 135 |  |  | — |
Balance at December 31, |  | $135 |  |  |  | $135 |  |  | — |
The unrecognized tax benefit of $135 thousand as of December 31, 2016 relates to a prior year deduction, in conjunction with the spin-off of the Performance Fibers business. There is no amount of unrecognized tax benefits that, if recognized, would have affected the effective tax rate at December 31, 2016, 2015 and 2014. The Company records interest (and penalties, if applicable) related to unrecognized tax benefits in non-operating expenses. The Company recorded $0 million, $0 million and $0.5 million benefit to interest expense in 2016, 2015 and 2014, respectively. The Company had no recorded liabilities for the payment of interest at December 31, 2016 and 2015. Tax Statutes The following table provides detail of the tax years that remain open to examination by the IRS and other significant taxing jurisdictions:
Taxing Jurisdiction | Open Tax Years
U.S. Internal Revenue Service | 2013 - 2016
New Zealand Inland Revenue | 2012 - 2016

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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=6907707&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=6907707&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=6907707&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=6907707&loc=d3e32537-109319 + Details
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