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Income Taxes | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | (10) Income Taxes On May 19, 2012, CVR became a member of the consolidated federal tax group of American Entertainment Properties Corporation ("AEPC"), a wholly-owned subsidiary of IEP, and subsequently entered into a tax allocation agreement with AEPC (the "Tax Allocation Agreement"). The Tax Allocation Agreement provides that AEPC will pay all consolidated federal income taxes on behalf of the consolidated tax group. CVR is required to make payments to AEPC in an amount equal to the tax liability, if any, that it would have paid if it were to file as a consolidated group separate and apart from AEPC. As of December 31, 2017 and 2016, the Company's Consolidated Balance Sheets reflected a receivable of $5.1 million and a payable of $10.6 million, respectively, for federal income taxes due to/from AEPC. These amounts are recorded as due to/from parent in the Consolidated Balance Sheets. During the years ended December 31, 2017, 2016 and 2015, the Company paid $15.0 million, $45.0 million and $57.5 million, respectively, to AEPC under the Tax Allocation Agreement. Income tax expense (benefit) is comprised of the following:
| Year Ended December 31,
| 2017 |  | 2016 |  | 2015
| (in millions)
Current |  |  |  |  |
Federal | $ | (0.7 | ) |  | $ | 67.2 |  |  | $ | 74.9 |
State | (22.1 | ) |  | (7.0 | ) |  | 14.5 |
Total current | (22.8 | ) |  | 60.2 |  |  | 89.4 |
Deferred |  |  |  |  |
Federal | (181.4 | ) |  | (61.0 | ) |  | 2.7 |
State | (12.7 | ) |  | (19.0 | ) |  | (7.6 | )
Total deferred | (194.1 | ) |  | (80.0 | ) |  | (4.9 | )
Total income tax expense (benefit) | $ | (216.9 | ) |  | $ | (19.8 | ) |  | $ | 84.5 |
The following is a reconciliation of total income tax expense (benefit) to income tax expense (benefit) computed by applying the statutory federal income tax rate (35%) to pretax income (loss):
| Year Ended December 31,
| 2017 |  | 2016 |  | 2015
| (in millions)
Tax computed at federal statutory rate | $ | 0.0 |  |  | $ | (3.8 | ) |  | $ | 133.8 |
State income taxes, net of federal tax benefit | (15.7 | ) |  | (8.0 | ) |  | 11.7 |
State tax incentives, net of federal tax expense | (6.9 | ) |  | (8.8 | ) |  | (7.2 | )
Domestic production activities deduction | — |  |  | (4.3 | ) |  | (5.9 | )
Noncontrolling interest | 6.1 |  |  | 5.5 |  |  | (44.9 | )
Other, net | 0.1 |  |  | (0.4 | ) |  | (3.0 | )
Adjustment to deferred tax assets and liabilities for enacted change in federal tax rate | (200.5 | ) |  | — |  |  | — |
Total income tax expense (benefit) | $ | (216.9 | ) |  | $ | (19.8 | ) |  | $ | 84.5 |
The 2017 state benefit is higher than expected due to the release of a portion of the reserve for uncertain tax positions on state credits and the related interest and the change in the value of the deferred tax assets and liabilities due to the reduced state tax rate. The impact of these items on the state income tax benefit, net of federal tax expense is $(14.3) million and $(1.7) million, respectively. The Company earns Kansas High Performance Incentive Program ("HPIP") credits for qualified business facility investment within the state of Kansas. CVR recognized a net income tax benefit of approximately $4.3 million, $5.7 million and $4.3 million on a credit of approximately $6.6 million, $8.7 million and $6.7 million for the years ended December 31, 2017, 2016 and 2015, respectively, with respect to the HPIP credits. The Company earns Oklahoma Investment credits for qualified manufacturing facility investment within the state of Oklahoma. CVR recognized a net income tax benefit of approximately $2.6 million, $3.1 million and $2.9 million on a credit of approximately $4.0 million, $4.8 million and $4.4 million for the years ended December 31, 2017, 2016 and 2015, respectively, with respect to the Oklahoma Investment credits. As of December 31, 2017, CVR has Kansas state income tax credits of approximately $9.3 million, which are available to reduce future Kansas state income taxes. These credits, if not used, will expire beginning in 2032. Additionally, CVR has Oklahoma state income tax credits of approximately $29.8 million which are available to reduce future Oklahoma state income taxes. These credits have an indefinite life. The Company also has a net operating loss carryforward of $27.5 million. The loss, if not used, will expire in 2037. The income tax benefit for the year ended December 31, 2017 was favorably impacted as a result of the Tax Cuts and Jobs Act (“TCJA”) legislation that was signed into law in December 2017, reducing the federal income tax rate from 35% to 21% beginning in 2018. The Company is required to reflect the impact of tax law changes in its consolidated financial statements in the period of enactment. As a result, our net deferred tax liabilities at December 31, 2017 were remeasured to reflect the lower tax rate that will be in effect for the years in which the deferred tax assets and liabilities will be realized. A benefit of approximately $200.5 million was recognized as a result of the remeasurement. The income tax effect of temporary differences that give rise to significant portions of the deferred income tax assets and deferred income tax liabilities at December 31, 2017 and 2016 are as follows:
| December 31,
| 2017 |  | 2016
| (in millions)
Deferred income tax assets: |  |  |
Personnel accruals | $ | — |  |  | $ | 1.3 |
State tax credit carryforward, net | 11.3 |  |  | 10.5 |
Net operating loss carryforward | 7.2 |  |  | — |
Other | — |  |  | 0.1 |
Total gross deferred income tax assets | 18.5 |  |  | 11.9 |
Deferred income tax liabilities: |  |  |
Personnel accruals | (1.2 | ) |  | — |
Property, plant, and equipment | (2.1 | ) |  | (3.8 | )
Investment in CVR Partners | (54.6 | ) |  | (89.2 | )
Investment in CVR Refining | (345.3 | ) |  | (497.8 | )
Prepaid expenses | (0.2 | ) |  | (0.3 | )
Other | (1.0 | ) |  | (0.7 | )
Total gross deferred income tax liabilities | (404.4 | ) |  | (591.8 | )
Net deferred income tax liabilities | $ | (385.9 | ) |  | $ | (579.9 | )
In assessing the realizability of deferred tax assets including net operating loss and credit carryforwards, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Although realization is not assured, management believes that it is more likely than not that all of the deferred tax assets will be realized and thus, no valuation allowance was provided as of December 31, 2017 and 2016. A reconciliation of the unrecognized tax benefits for the years ended December 31, 2017, 2016 and 2015 is as follows:
| Year Ended December 31,
| 2017 |  | 2016 |  | 2015
| (in millions)
Balance beginning of year | $ | 44.1 |  |  | $ | 49.0 |  |  | $ | 55.5 |
Increase based on prior year tax positions | — |  |  | — |  |  | — |
Decrease based on prior year tax positions | — |  |  | — |  |  | — |
Increases in current year tax positions | — |  |  | — |  |  | 9.8 |
Settlements | — |  |  | — |  |  | — |
Reductions related to expirations of statute of limitations | (15.4 | ) |  | (4.9 | ) |  | (16.3 | )
Balance end of year | $ | 28.7 |  |  | $ | 44.1 |  |  | $ | 49.0 |
Included in the balance of unrecognized tax benefits as of December 31, 2017, 2016 and 2015 are $22.7 million, $28.7 million and $31.8 million, respectively, of tax benefits that, if recognized, would affect the effective tax rate. Approximately $15.4 million of the unrecognized tax positions relating to state tax credits were recognized in 2017 as a result of a lapse of statute of limitations. Approximately $4.9 million of the unrecognized tax positions relating to state tax credits were recognized in 2016 as a result of a lapse of statute of limitations. Approximately $16.3 million of the unrecognized tax positions relating to the characterization of partnership distributions received were recognized by the end of 2015 as a result of a lapse of the statute of limitations. Additionally, the Company believes that it is reasonably possible that approximately $5.8 million of its unrecognized tax positions relating to state tax credits may be recognized by the end of 2018 as a result of a lapse of the statute of limitations. Approximately $25.8 million and $25.7 million of unrecognized tax benefits were netted with deferred tax asset carryforwards as of December 31, 2017 and 2016, respectively. The remaining unrecognized tax benefits are included in other long-term liabilities in the Consolidated Balance Sheets. CVR recognizes interest expense (income) and penalties on uncertain tax positions and income tax deficiencies (refunds) in income tax expense. CVR recognized interest benefit of approximately $7.0 million during 2017 and has recognized a liability for interest of approximately $1.0 million as of December 31, 2017. In 2016, CVR recognized interest expense of approximately $0.5 million and had recognized a liability for interest of approximately $8.0 million as of December 31, 2016. In 2015, CVR recognized interest expense of approximately $1.0 million and had recognized a liability for interest of approximately $7.5 million as of December 31, 2015. No penalties were recognized during 2017, 2016 or 2015. At December 31, 2017, the Company's tax filings are generally open to examination in the United States for the tax years ended December 31, 2014 through December 31, 2016 and in various individual states for the tax years ended December 31, 2013 through December 31, 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 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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