XML 40 R23.htm IDEA: XBRL DOCUMENT
v3.20.4

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes |
| (16) | Income Taxes
The Company and its subsidiaries file income tax returns in the U.S. federal, and various states and foreign jurisdictions. The Company assessed its uncertain tax positions and determined that it has no material uncertain tax position at December 31, 2020. The components of income before income taxes consist of the following:
|  | Year ended December 31,
|  | 2020 |  | 2019 |  | 2018
U.S. operations |  | $ | 9,577 |  |  | $ | 23,384 |  |  | $ | 15,162 |
Foreign operations |  |  | 59,772 |  |  |  | 81,762 |  |  |  | 80,697 |
|  | $ | 69,349 |  |  | $ | 105,146 |  |  | $ | 95,859 |
The provision for current and deferred income tax expense (benefit) consists of the following:
|  | Year ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 1,685 |  |  | $ | 3,280 |  |  | $ | 1,629 |
State and local |  |  | 90 |  |  |  | 713 |  |  |  | 497 |
Foreign |  |  | 17,024 |  |  |  | 27,412 |  |  |  | 24,175 |
|  |  | 18,799 |  |  |  | 31,405 |  |  |  | 26,301 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (215 | ) |  |  | (3 | ) |  |  | 113 |
State and local |  |  | 44 |  |  |  | (22 | ) |  |  | — |
Foreign |  |  | 753 |  |  |  | (2,304 | ) |  |  | (270 | )
|  |  | 582 |  |  |  | (2,329 | ) |  |  | (157 | )
Total income tax expense |  | $ | 19,381 |  |  | $ | 29,076 |  |  | $ | 26,144 |
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:
|  | December 31, |
|  | 2020 |  |  | 2019 |
Net deferred tax assets: |  |  |  |  |  |  |  |
Foreign net operating loss carry-forwards |  | $ | 360 |  |  | $ | 362 |
Inventory and accounts receivable |  |  | 1,928 |  |  |  | 1,231 |
Profit sharing |  |  | 2,936 |  |  |  | 4,812 |
Stock option compensation |  |  | 718 |  |  |  | 588 |
Effect of inventory profit elimination |  |  | 4,443 |  |  |  | 4,630 |
Other |  |  | 910 |  |  |  | 214 |
Total gross deferred tax assets, net |  |  | 11,295 |  |  |  | 11,837 |
Valuation allowance |  |  | (360 | ) |  |  | (361 | )
Net deferred tax assets |  |  | 10,935 |  |  |  | 11,476 |
Deferred tax liabilities (long-term): |  |  |  |  |  |  |  |
Trademarks and licenses |  |  | (2,894 | ) |  |  | (3,472 | )
Net deferred tax assets |  | $ | 8,041 |  |  | $ | 8,004 |
Valuation allowances are provided for foreign net operating loss carry-forwards, as future profitable operations from certain foreign subsidiaries might not be sufficient to realize the full amount of net operating loss carry-forwards. No other valuation allowances have been provided as management believes that it is more likely than not that the asset will be realized in the reduction of future taxable income. Tax Cuts and Jobs Act In December 2017, the U.S. government passed the Tax Cuts and Jobs Act (“the Tax Act”). The Tax Act made broad and complex changes to the U.S. tax code, including, but not limited to reducing the U.S. federal corporate tax rate from 35% to 21% beginning in 2018, and requiring companies to pay a one-time transition tax on certain unremitted earnings of foreign subsidiaries. The Tax Act also established new tax laws that took effect in 2018, including, but not limited to: (i) the reduction of the U.S. federal corporate tax rate discussed above; (ii) a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries; (iii) a provision designed to tax global intangible low-taxed income (“GILTI”); and (iv) a provision that allows a domestic corporation an immediate deduction for a portion of its foreign derived intangible income (“FDII”). The Company estimated of the effect of GILTI and has determined that it has no tax liability related to GILTI as of December 31, 2020, 2019 and 2018. The Company also estimated the effect of FDII and recorded a tax benefit of approximately $0.3 million, $0.9 million and $0.6 million as of December 31, 2020, 2019 and 2018, respectively. Other Tax Matters The French authorities are considering that the existence of IP Suisse, a wholly-owned subsidiary of Interparfums SA, does not, in and of itself, constitute a permanent establishment and therefore Interparfums, SA should pay French taxes on all or part of the profits of that entity. The French Tax Authority notified the Company that IP Suisse will be the subject of a tax audit covering the period January 1, 2010 through December 31, 2018. No claim or assessment for any taxes or penalties has been made at this time. The Company disagrees and is prepared to vigorously defend its position. Consequently, no provision has been made in the accompanying financial statements as we believe it is more-likely-than-not that our position will be sustained based on its technical merits. Although we believe that we have sufficient arguments to support our position, there exists a risk that the French authorities may prevail. The Company’s exposure in connection with this matter is approximately $5.8 million, net of recovery taxes already paid to the Swiss authorities, and excluding interest. The Company is no longer subject to U.S. federal, state, and local or non-U.S. income tax examinations by tax authorities for years before 2017. Differences between the United States federal statutory income tax rate and the effective income tax rate were as follows:
|  | Year ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Statutory rates |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 21.0 | %
State and local taxes, net of Federal benefit |  |  | 0.2 |  |  |  | 0.6 |  |  |  | 0.4 |
Benefit of Foreign Derived Intangible Income |  |  | (0.4 | ) |  |  | (0.9 | ) |  |  | (0.6 | )
Effect of foreign taxes greater than |  |  |  |  |  |  |  |  |  |  |  |
U.S. statutory rates |  |  | 7.5 |  |  |  | 7.5 |  |  |  | 7.3 |
Other |  |  | (0.4 | ) |  |  | (0.6 | ) |  |  | (0.8 | )
Effective rates |  |  | 27.9 | % |  |  | 27.6 | % |  |  | 27.3 | %

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration