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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income Before Income Taxes | Polaris’ income from continuing operations before income taxes was generated from its United States and foreign operations as follows (in thousands):
| For the Years Ended December 31,
| 2017 |  | 2016 |  | 2015
United States | $ | 264,207 |  |  | $ | 262,403 |  |  | $ | 640,604 |
Foreign | 54,584 |  |  | 50,848 |  |  | 45,133 |
Income from continuing operations before income taxes | $ | 318,791 |  |  | $ | 313,251 |  |  | $ | 685,737 |
Components of Provision for Income Taxes | Components of Polaris’ provision for income taxes for continuing operations are as follows (in thousands):
| For the Years Ended December 31,
| 2017 |  | 2016 |  | 2015
Current: |  |  |  |  |
Federal | $ | 41,134 |  |  | $ | 103,717 |  |  | $ | 211,017 |
State | 7,264 |  |  | 4,780 |  |  | 16,609 |
Foreign | 22,267 |  |  | 17,367 |  |  | 20,733 |
Deferred | 75,634 |  |  | (25,561 | ) |  | (17,983 | )
Total provision for income taxes for continuing operations | $ | 146,299 |  |  | $ | 100,303 |  |  | $ | 230,376 |
Reconciliation of Federal Statutory Income Tax Rate to Effective Tax Rate | Reconciliation of the Federal statutory income tax rate to the effective tax rate is as follows:
| For the Years Ended December 31,
| 2017 |  | 2016 |  | 2015
Federal statutory rate | 35.0 | % |  | 35.0 | % |  | 35.0 | %
State income taxes, net of federal benefit | 1.4 |  |  | 1.4 |  |  | 1.5 |
Domestic manufacturing deduction | (0.5 | ) |  | (2.1 | ) |  | (0.8 | )
Research and development tax credit | (5.6 | ) |  | (4.3 | ) |  | (3.1 | )
Stock based compensation | (4.4 | ) |  | — |  |  | — |
Valuation allowance for foreign subsidiaries net operating losses | 1.2 |  |  | — |  |  | 0.2 |
Tax rate changes | 17.4 |  |  | — |  |  | — |
Non-deductible expenses | 2.0 |  |  | 2.4 |  |  | 0.4 |
Other permanent differences | (0.6 | ) |  | (0.4 | ) |  | 0.4 |
Effective income tax rate for continuing operations | 45.9 | % |  | 32.0 | % |  | 33.6 | %
Net Deferred Income Taxes | The net deferred income taxes consist of the following (in thousands):
| December 31,
| 2017 |  | 2016
Deferred income taxes: |  |  |
Inventories | $ | 11,072 |  |  | $ | 13,252 |
Accrued expenses | 102,308 |  |  | 152,798 |
Derivative instruments | 10 |  |  | (175 | )
Cost in excess of net assets of business acquired | (15,171 | ) |  | (10,257 | )
Property and equipment | (52,757 | ) |  | (56,240 | )
Compensation payable in common stock | 55,350 |  |  | 73,297 |
Net operating loss carryforwards and impairments | 13,628 |  |  | 13,650 |
Valuation allowance | (9,057 | ) |  | (6,981 | )
Total net deferred income tax asset | $ | 105,383 |  |  | $ | 179,344 |
Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows (in thousands):
| For the Years Ended December 31,
| 2017 |  | 2016
Balance at January 1, | $ | 25,001 |  |  | $ | 22,509 |
Gross increases for tax positions of prior years | 1,935 |  |  | 3,065 |
Gross increases for tax positions of current year | 2,397 |  |  | 4,672 |
Decreases due to settlements and other prior year tax positions | (10,338 | ) |  | (3,424 | )
Decreases for lapse of statute of limitations | — |  |  | (1,782 | )
Currency translation effect on foreign balances | 101 |  |  | (39 | )
Balance at December 31, | 19,096 |  |  | 25,001 |
Reserves related to potential interest at December 31, | 1,018 |  |  | 1,389 |
Unrecognized tax benefits at December 31, | $ | 20,114 |  |  | $ | 26,390 |

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- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: 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=65882285&loc=d3e32639-109319 + Details
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- Definition Tabular disclosure for tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities and other income tax contingencies. Includes, but is not limited to, interest and penalties, reconciliation of unrecognized tax benefits, unrecognized tax benefits that would affect the effective tax rate, tax years that remain subject to examination by tax jurisdictions, and information about positions for which it is reasonably possible that amounts unrecognized will significantly change within 12 months. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15A -URI http://asc.fasb.org/extlink&oid=65882285&loc=SL6600010-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 19 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32840-109319 + Details
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