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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | NOTE 15. INCOME TAXES As a REIT, we generally are not subject to federal and state corporate income taxes on income from investments in real estate that we distribute to our shareholders. We conduct certain activities through our PotlatchDeltic TRS which are subject to corporate level federal and state income taxes. These activities are principally comprised of our wood products manufacturing operations and certain real estate investments. Therefore, income tax expense or benefit is primarily due to income or loss of the PotlatchDeltic TRS, as well as permanent book versus tax differences. We are also subject to corporate taxes on built-in gains (the excess of fair market value over tax basis on the merger date) on sales of former Deltic real property held by the REIT during the five years following the Deltic merger. The sale of standing timber is not subject to built-in gains tax. Income tax expense consists of the following for the years ended December 31:
(in thousands) |  | 2020 |  |  | 2019 |  |  | 2018 |
Current |  | $ | 41,733 |  |  | $ | 12,055 |  |  | $ | 7,038 |
Deferred |  |  | (14,610 | ) |  |  | (11,082 | ) |  |  | 11,370 |
Net operating loss carryforwards |  |  | — |  |  |  | 37 |  |  |  | 791 |
Income taxes |  | $ | 27,123 |  |  | $ | 1,010 |  |  | $ | 19,199 |
Income tax expense differs from the amount computed by applying the statutory federal income tax rate of 21% to income before income taxes due to the following for the years ended December 31:
(in thousands, except effective tax rate) |  | 2020 |  |  | 2019 |  |  | 2018 |
U.S. federal statutory income tax |  | $ | 40,730 |  |  | $ | 11,901 |  |  | $ | 29,837 |
REIT income not subject to federal income tax |  |  | (16,949 | ) |  |  | (11,285 | ) |  |  | (8,773 | )
Pension contribution deducted at higher tax rate |  |  | — |  |  |  | — |  |  |  | (5,665 | )
Change in valuation allowance |  |  | (395 | ) |  |  | (395 | ) |  |  | — |
State income taxes, net of federal income tax |  |  | 4,458 |  |  |  | 903 |  |  |  | 3,712 |
Permanent book-tax differences |  |  | (1,315 | ) |  |  | (793 | ) |  |  | (771 | )
Other items, net |  |  | 594 |  |  |  | 679 |  |  |  | 859 |
Income taxes |  | $ | 27,123 |  |  | $ | 1,010 |  |  | $ | 19,199 |
Effective tax rate |  |  | 14.0 | % |  |  | 1.8 | % |  |  | 13.5 | %
The tax effects of significant temporary differences creating deferred tax assets and liabilities at December 31 were:
(in thousands) |  | 2020 |  |  | 2019 |
Deferred tax assets: |  |  |  |  |  |  |  |
Pension and other postretirement employee benefits |  | $ | 34,703 |  |  | $ | 32,110 |
Inventories |  |  | 552 |  |  |  | 754 |
Tax credits |  |  | 1,519 |  |  |  | 2,190 |
Nondeductible accruals |  |  | 2,005 |  |  |  | 815 |
Incentive compensation |  |  | 971 |  |  |  | 1,044 |
Employee benefits |  |  | 1,323 |  |  |  | 1,316 |
Other |  |  | 1,110 |  |  |  | 1,296 |
Total deferred tax assets |  |  | 42,183 |  |  |  | 39,525 |
Valuation allowance |  |  | — |  |  |  | (395 | )
Deferred tax assets, net of valuation allowance |  |  | 42,183 |  |  |  | 39,130 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Timber and timberlands, net |  |  | (354 | ) |  |  | (965 | )
Property, plant and equipment, net |  |  | (52,698 | ) |  |  | (50,901 | )
Intangible assets, net |  |  | (3,656 | ) |  |  | (3,778 | )
Real estate development |  |  | (1,236 | ) |  |  | (1,402 | )
Other |  |  | (1,979 | ) |  |  | (2,249 | )
Total deferred tax liabilities |  |  | (59,923 | ) |  |  | (59,295 | )
Deferred tax liabilities, net |  | $ | (17,740 | ) |  | $ | (20,165 | )
At December 31, 2020, we had no state or federal net operating loss carryforwards. We have Idaho Investment Tax Credits of $1.9 million that expire from 2026 through 2034. We use the flow-through method of accounting for investment tax credits. We believe it is more likely than not that we will have sufficient future taxable income to realize our deferred tax assets. The following table summarizes the tax years subject to examination by major taxing jurisdictions:
Jurisdiction |  | Years
Federal |  | 2017 — 2020
Arkansas |  | 2017 — 2020
Idaho |  | 2017 — 2020
Michigan |  | 2016 — 2020
Minnesota |  | 2016 — 2020
At December 31, 2020 and 2019, we had no unrecognized tax benefits. The following is a reconciliation of the beginning and ending unrecognized tax benefits for the year-ended December 31, 2019:
(in thousands) |  | 2019 |
Balance at January 1 |  | $ | 564 |
Additions for tax positions of prior years |  |  | — |
Reduction for tax positions of prior years |  |  | (564 | )
Balance at December 31 |  | $ | — |
We reflect accrued interest related to tax obligations, as well as penalties, in our provision for income taxes. For the years ended December 31, 2020, 2019 and 2018, we recognized insignificant amounts related to interest and penalties in our tax provision. At December 31, 2020, 2019 and 2018, we had insignificant amounts of accrued interest related to tax obligations and no accrued interest receivable with respect to open tax refunds.

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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/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
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