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INCOME TAXES | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES PBF Energy is required to file federal and applicable state corporate income tax returns and recognizes income taxes on its pre-tax income, which to-date has consisted primarily of its share of PBF LLC’s pre-tax income (see “Note 14 - Stockholders’ and Members’ Equity Structure”). PBF LLC is organized as a limited liability company and PBFX is an MLP, both of which are treated as “flow-through” entities for federal income tax purposes and therefore are not subject to income taxes apart from the income tax attributable to the two subsidiaries acquired in connection with the acquisition of Chalmette Refining and PBF Holding’s wholly-owned Canadian subsidiary, PBF Ltd., that are treated as C-Corporations for income tax purposes. Tax Cuts and Jobs Act On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the TCJA. The TCJA makes broad and complex changes to the U.S. tax code, including, but not limited to, (1) reducing the U.S. federal corporate tax rate from 35 percent to 21 percent; (2) requiring companies to pay a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries (the “Transition Tax”); (3) generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries; (4) requiring a current inclusion in U.S. federal taxable income of certain earnings of controlled foreign corporations; (5) eliminating the corporate alternative minimum tax (“AMT”) and changing how existing AMT credits can be realized; (6) creating the base erosion anti-abuse tax (“BEAT”), a new minimum tax; (7) creating a new limitation on deductible interest expense; and (8) changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017. In connection with the enactment of the TCJA, PBF Energy recorded a net tax expense of $20,153 in the year ending December 31, 2017 as further discussed below. The other legislative areas within TCJA, such as the Transition Tax and the Global Low-Taxed Intangible Income, did not have a material impact on the provision for income taxes. Additionally, the new legislation did not have any impact on the need for a valuation allowance. Given the Company’s reversing taxable temporary differences and history of generating book income, no valuation allowances have been provided for all periods presented. The Company has completed its accounting for the impact of the TCJA and has recorded no additional material items. The income tax provision in the PBF Energy consolidated statements of operations consists of the following:
| Year Ended December 31, 2018 |  | Year Ended December 31, 2017 |  | Year Ended December 31, 2016
Current expense (benefit): |  |  |  |  |
Federal | $ | 766 |  |  | $ | 1,534 |  |  | $ | (87,829 | )
Foreign | — |  |  | 75 |  |  | — |
State | — |  |  | 142 |  |  | (19,279 | )
Total current | 766 |  |  | 1,751 |  |  | (107,108 | )
Deferred expense (benefit): |  |  |  |  |
Federal | 18,693 |  |  | 250,042 |  |  | 205,502 |
Foreign | 7,221 |  |  | (3,595 | ) |  | (8,412 | )
State | 6,827 |  |  | 67,386 |  |  | 47,668 |
Total deferred | 32,741 |  |  | 313,833 |  |  | 244,758 |
Total provision for income taxes | $ | 33,507 |  |  | $ | 315,584 |  |  | $ | 137,650 |
The difference between PBF Energy’s effective income tax rate and the United States statutory rate is reconciled below:
| Year Ended December 31, 2018 |  | Year Ended December 31, 2017 |  | Year Ended December 31, 2016
Provision at Federal statutory rate | 21.0 | % |  | 35.0 | % |  | 35.0 | %
Increase (decrease) attributable to flow-through of certain tax adjustments: |  |  |  |  |
State income taxes (net of federal income tax) | 5.0 | % |  | 4.6 | % |  | 4.6 | %
Nondeductible/nontaxable items | 1.0 | % |  | 0.2 | % |  | 0.1 | %
Manufacturer’s benefit deduction | — | % |  | — | % |  | 1.9 | %
Rate differential from foreign jurisdictions | 0.9 | % |  | 0.3 | % |  | 1.5 | %
Provision to return adjustment | (4.0 | )% |  | — | % |  | (0.4 | )%
Adjustment to deferred tax assets and liabilities for change in tax rates | — | % |  | 2.8 | % |  | 1.7 | %
Stock-based compensation | (2.6 | )% |  | — | % |  | — | %
Other | (0.6 | )% |  | 0.3 | % |  | 0.2 | %
Effective tax rate | 20.7 | % |  | 43.2 | % |  | 44.6 | %
PBF Energy’s effective income tax rate for the years ended December 31, 2018, 2017 and 2016, including the impact of income attributable to noncontrolling interests of $46,976, $67,914 and $54,707, respectively, was 16.0%, 39.5% and 37.9%, respectively. For the year ended December 31, 2018, the main drivers of PBF Energy’s reduced effective tax rate related to the treatment of stock-based compensation excess tax benefits under recently adopted ASU No. 2017-09, “Compensation—Stock Compensation”, and the provision to return adjustments primarily attributable to the state business mix apportionment. During 2017, PBF Energy made a one-time adjustment to deferred tax assets and liabilities in relation to the TCJA. The net result of the adjustment was a charge of approximately $20,153, or an increase to the tax rate of 2.8%. Under GAAP, PBF Energy is required to recognize the effect of the TCJA in the period of enactment. As such, net income tax expense recorded in 2017 consisted of a net tax expense of $193,499 associated with the remeasurement of Tax Receivable Agreement associated deferred tax assets and a net tax benefit of $173,346 for the reduction of our deferred tax liabilities as a result of the TCJA. For years starting before January 1, 2018, the Company’s foreign earnings are taxed at a lower income tax rate as compared to its domestic operations. Accordingly, the Company recognized an income tax expense in 2017 as its foreign entity’s operations resulted in a loss. Adjustments to deferred tax assets and liabilities for changes in tax rates in 2016 were a result of changes in business mix, including the 2016 acquisition of the Torrance refinery and related logistics assets in California. For financial reporting purposes, income (loss) before income taxes attributable to PBF Energy Inc. stockholders includes the following components:
| Year Ended December 31, 2018 |  | Year Ended December 31, 2017 |  | Year Ended December 31, 2016
United States | $ | 134,318 |  |  | $ | 749,559 |  |  | $ | 343,875 |
Foreign | 27,504 |  |  | (18,458 | ) |  | (35,414 | )
Total income before income taxes attributable to PBF Energy Inc. stockholders | $ | 161,822 |  |  | $ | 731,101 |  |  | $ | 308,461 |
A summary of the components of PBF Energy’s deferred tax assets and deferred tax liabilities consists of the following:
| December 31, 2018 |  | December 31, 2017
Deferred tax assets |  |  |
Purchase interest step-up | $ | 306,231 |  |  | $ | 325,405 |
Inventory | 46,958 |  |  | — |
Pension, employee benefits and compensation | 55,103 |  |  | 40,455 |
Hedging | 3,127 |  |  | 24,175 |
Net operating loss carry forwards | 134,672 |  |  | 137,887 |
Environmental liabilities | 38,121 |  |  | 38,388 |
Other | 2,749 |  |  | 3,709 |
Total deferred tax assets | 586,961 |  |  | 570,019 |
Valuation allowances | — |  |  | — |
Total deferred tax assets, net | 586,961 |  |  | 570,019 |
Deferred tax liabilities |  |  |
Property, plant and equipment | 578,826 |  |  | 528,336 |
Inventory | — |  |  | 21,200 |
Total deferred tax liabilities | 578,826 |  |  | 549,536 |
Net deferred tax assets | $ | 8,135 |  |  | $ | 20,483 |
As of December 31, 2018, PBF Energy has federal and state income tax net operating loss carry forwards of $546,053 and $300,956, respectively. The federal net operating loss carry forward was generated in years prior to 2018 and expires in varying amounts through 2037. The state net operating loss carry forwards expire at various dates from 2028 through 2038. The Company has not recorded any valuation allowances against these assets, as it is deemed “more likely than not” that the deferred tax assets will be realized, based on the Company’s historical earnings, forecasted income, and the reversal of temporary differences. The reported income tax expense (benefit) in the PBF LLC consolidated statements of operations consists of the following:
| Year Ended December 31, 2018 |  | Year Ended December 31, 2017 |  | Year Ended December 31, 2016
Current income tax expense (benefit) | $ | 766 |  |  | $ | 1,743 |  |  | $ | 3,887 |
Deferred income tax (benefit) expense | 7,233 |  |  | (12,526 | ) |  | 19,802 |
Total income tax expense (benefit) | $ | 7,999 |  |  | $ | (10,783 | ) |  | $ | 23,689 |
During the preparation of the financial statements for the first quarter of 2016, management determined that the deferred income tax liabilities for PBF Ltd. were understated for prior periods. For the three months ended March 31, 2016, the Company incurred $30,602 of deferred tax expense and $121 of current tax expense relating to a correction of prior periods. Income tax years that remain subject to examination by material jurisdictions, where an examination has not already concluded are all years including and subsequent to:
United States |
Federal | 2015
New Jersey | 2013
Michigan | 2014
Delaware | 2015
Indiana | 2015
Pennsylvania | 2015
New York | 2015
Louisiana | 2015
California | 2016
The Company does not have any unrecognized tax benefits.

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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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