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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Income Statement Components Earnings before income taxes were as follows:
|  | December 31,
(in thousands) |  | 2021 |  | 2020 |  | 2019
Income before income taxes: |  |  |  |  |  |
Domestic |  | $ | 74,070 |  |  | $ | 50,977 |  |  | $ | 54,830 |
Foreign |  | 35,428 |  |  | 28,780 |  |  | 29,769 |
|  | $ | 109,498 |  |  | $ | 79,757 |  |  | $ | 84,599 |
The components of income tax expense (benefit) were as follows:
|  | December 31,
(in thousands) |  | 2021 |  | 2020 |  | 2019
Current: |  |  |  |  |  |
Domestic |  | $ | 16,846 |  |  | $ | 10,823 |  |  | $ | 6,403 |
Foreign |  | 8,646 |  |  | 8,759 |  |  | 8,419 |
State |  | 4,943 |  |  | 3,226 |  |  | 3,291 |
|  | 30,435 |  |  | 22,808 |  |  | 18,113 |
Deferred: |  |  |  |  |  |
Domestic |  | (679) |  |  | 1,238 |  |  | 3,906 |
Foreign |  | (274) |  |  | (1,199) |  |  | (280) |
State |  | (229) |  |  | (894) |  |  | (243) |
|  | (1,182) |  |  | (855) |  |  | 3,383 |
Total income taxes |  | $ | 29,253 |  |  | $ | 21,953 |  |  | $ | 21,496 |
A reconciliation of the income tax at the Company’s U.S. statutory federal income tax rate to the provision for income taxes follows:
|  | December 31,
(in thousands) |  | 2021 |  | 2020 |  | 2019
Income tax expense at statutory rates |  | $ | 22,995 |  |  | $ | 16,749 |  |  | $ | 17,765 |
Increase (reduction) from: |  |  |  |  |  |
Jurisdictional rate differences |  | 1,599 |  |  | 1,034 |  |  | 988 |
Executive compensation limitation |  | 1,314 |  |  | 170 |  |  | 715 |
Stock based compensation |  | (322) |  |  | (366) |  |  | (358) |
U.S. state taxes |  | 3,724 |  |  | 2,556 |  |  | 3,137 |
Foreign tax expense |  | — |  |  | 704 |  |  | — |
R&D credit |  | (670) |  |  | (415) |  |  | (699) |
GILTI |  | — |  |  | 50 |  |  | 872 |
Previously unrecognized tax (benefit)/expense |  | 8 |  |  | 2,219 |  |  | (1,504) |
Other, net |  | 605 |  |  | (748) |  |  | 580 |
Provision for income taxes |  | $ | 29,253 |  |  | $ | 21,953 |  |  | $ | 21,496 |
Effective tax rate |  | 27 | % |  | 28 | % |  | 25 | %
Deferred Income Tax Assets and Liabilities The components of the Company’s deferred income tax assets and liabilities were as follows:
|  | December 31,
(in thousands) |  | 2021 |  | 2020
Deferred income tax assets: |  |  |  |
Inventory basis difference |  | $ | 892 |  |  | $ | 519 |
Accounts receivable reserve |  | 240 |  |  | 255 |
Rental equipment and Property, plant and equipment |  | 201 |  |  | 144 |
Stock based compensation |  | 688 |  |  | 606 |
Pension liability |  | 3,116 |  |  | 3,655 |
Employee benefit accrual |  | 2,747 |  |  | 1,585 |
Product liability and warranty reserves |  | 2,155 |  |  | 2,242 |
Foreign net operating loss |  | 3,764 |  |  | 3,566 |
Lease liability |  | 3,858 |  |  | 3,376 |
State net operating loss |  | 157 |  |  | 148 |
Other |  | 1,016 |  |  | 1,891 |
Total deferred income tax assets |  | $ | 18,834 |  |  | $ | 17,987 |
Less: Valuation allowance |  | (4,129) |  |  | (3,641) |
Net deferred income tax assets |  | $ | 14,705 |  |  | $ | 14,346 |
Deferred income tax liabilities: |  |  |  |
Inventory basis differences |  | $ | (165) |  |  | $ | (287) |
Rental equipment and Property, plant and equipment |  | (13,844) |  |  | (14,818) |
Lease asset |  | (3,794) |  |  | (3,351) |
Intangible assets |  | (16,197) |  |  | (16,496) |
Expenses not currently deductible for book purposes |  | (1,053) |  |  | (1,003) |
Total deferred income tax liabilities |  | $ | (35,053) |  |  | $ | (35,955) |
Net deferred income taxes |  | $ | (20,348) |  |  | $ | (21,609) |
As of December 31, 2021, the Company had foreign deferred tax assets consisting of foreign net operating losses and other tax benefits available to reduce future taxable income in a foreign jurisdiction. These foreign jurisdictions’ net operating loss carry-forwards are approximately $11.8 million with an unlimited carry-forward period, and $0.8 million with a carry-forward expiring in 2035. The Company also has U.S. state net operating loss carry-forwards in the amount of $3.6 million which will expire between 2022 and 2030. The Company's valuation allowances as of December 31, 2021 and 2020 related primarily to foreign net operating losses and foreign tax credits. Unrecognized Tax Benefits A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows. The Company does not expect the unrecognized tax benefits to change significantly over the next 12 months.
Unrecognized Tax Benefits
|  | December 31,
(in thousands) |  | 2021 |  | 2020
Balance as of beginning of year |  | $ | 262 |  |  | $ | 262 |
Increases for tax positions related to the current year |  | 82 |  |  | 88 |
Decreases due to lapse of statute of limitations |  | (74) |  |  | (88) |
Balance as of end of year |  | $ | 270 |  |  | $ | 262 |
The Company has adopted the policy to include interest and penalty expense related to income taxes as interest and other expense, respectively. As of December 31, 2021, no interest or penalties have accrued. With few exceptions, the Company’s open tax years for its federal and state income tax returns are for the tax years ended 2018 through 2021, and for tax years ended 2014 through 2021 for its foreign income tax returns. The Company currently intends to permanently reinvest its earnings in certain foreign subsidiaries. No U.S. corporate income taxes or foreign withholding taxes should be imposed on future distributions of the earnings not permanently reinvested. If the amounts asserted as permanent reinvestment were distributed, the Company would be subject to approximately $4.5 million in withholding taxes.

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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=121826272&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=122134291&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=121826272&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=122134291&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=121826272&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 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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