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Income Taxes
 12 Months Ended
Dec. 31, 2020
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income before income taxes by geographic area was, for the years ended December 31:
(in thousands)202020192018
Federal$77,195 $46,445 $48,393 
Foreign4,190 3,997 (5,325)
$81,385 $50,442 $43,068 
Income tax expense consisted of the following for the years ended December 31:
(in thousands)202020192018
Current
Federal$19,014 $6,976 $5,155 
State6,363 3,562 3,310 
25,377 10,538 8,465 
Deferred
Federal(2,519)3,010 4,936 
Foreign963 874 (822)
State(1,195)(194)(805)
(2,751)3,690 3,309 
Income tax expense$22,626 $14,228 $11,774 
The differences between the U.S. federal statutory tax rate and the Company’s effective tax rate for operations were as follows for the years ended December 31:
202020192018
U.S federal statutory rate21.0 %21.0 %21.0 %
State income taxes, net of U.S. federal income tax expense5.0 4.7 5.2 
Change in valuation allowance0.1 (0.3)1.2 
Tax differential on foreign earnings— 0.4 (0.5)
Non-deductible meals and entertainment0.4 0.8 0.8 
Stock compensation excess tax benefits(0.6)0.1 (0.1)
Uncertain tax positions0.3 (0.4)0.1 
Provision to return adjustments, net0.4 0.2 (0.2)
Global intangible low tax income0.9 0.3 — 
Non-controlling interest— 0.9 (0.5)
Other income, net0.3 0.5 0.3 
Effective rate27.8 %28.2 %27.3 %
The net deferred tax assets and (liabilities) arising from temporary differences was as follows at December 31:
(in thousands)20202019
Deferred income tax assets:
Self insurance reserves$4,091 $4,458 
Contract loss reserves703 642 
Stock-based awards1,300 1,164 
Bonus7,554 4,904 
Operating lease liabilities5,715 5,850 
Non-U.S. operating loss3,601 5,499 
Other7,250 3,439 
Total deferred income tax assets before valuation allowances30,214 25,956 
Less: valuation allowances(2,566)(2,508)
Total deferred income tax assets27,648 23,448 
Deferred income tax liabilities:
Property and equipment — tax over book depreciation(34,439)(32,220)
Intangible assets — tax over book amortization(1,960)(1,856)
Right-of-use operating lease assets(5,702)(5,850)
Non-U.S. deferred income tax liabilities(1,322)(2,280)
Other(2,564)(2,187)
Total deferred income tax liabilities(45,987)(44,393)
Net deferred income taxes$(18,339)$(20,945)
The Company determined that it is more-likely-than-not that it will not realize the deferred tax assets on certain Canadian subsidiaries and recorded a valuation allowance against the entire related deferred tax assets for those entities.
As of December 31, 2020, the Company had no undistributed earnings of our Canadian subsidiaries. We expect future earnings to be reinvested. Accordingly, as of December 31, 2020, no expense for U.S. income taxes or foreign withholding taxes was recorded.
The Company is subject to taxation in various jurisdictions. The Company’s 2017 through 2019 tax returns are subject to examination by U. S. federal authorities. The Company’s tax returns are subject to examination by various state authorities for the years 2016 through 2019.
The Company has recorded a liability for unrecognized tax benefits related to tax positions taken on its various income tax returns. If recognized, the entire amount of unrecognized tax benefits would favorably impact the effective tax rate that is reported in future periods. The increase in the unrecognized tax benefits as of December 31, 2020 was primarily due to revaluation of the likelihood of the uncertain tax positions. The total unrecognized tax benefits is expected to be reduced by less than $0.1 million within the next 12 months. Interest and penalties related to uncertain income tax positions are included as a component of income tax expense in the Financial Statements.
The following is a reconciliation of the beginning and ending liability for unrecognized tax benefits at December 31:
(in thousands)20202019
Balance at beginning of period$152 $327 
Gross increases in current period tax positions217 31 
Settlements with taxing authorities— (88)
Reductions in tax positions due to lapse of statutory limitations(16)(118)
Balance at end of period353 152 
Accrued interest and penalties at end of period69 24 
Total liability for unrecognized tax benefits$422 $176 
The liability for unrecognized tax benefits, including accrued interest and penalties, was included in other liabilities on the accompanying consolidated balance sheets. The amount of interest and penalties charged or credited to income tax expense as a result of the unrecognized tax benefits was not significant in the years ended December 31, 2020, 2019 and 2018.