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Income Taxes | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | NOTE 7. Income Taxes The Tax Cuts and Jobs Act was enacted on December 22, 2017. The Act reduces the US federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. At December 31, 2017, we have not completed our accounting for the tax effects of enactment of the Act; however, in certain cases, as described below, we have made a reasonable estimate of the effects on our existing deferred tax balances and the one-time transition tax. In other cases, we have not been able to make a reasonable estimate and continue to account for those items based on our existing accounting under ASC 740, Income Taxes, and the provisions of the tax laws that were in effect immediately prior to enactment. For the items for which we were able to determine a reasonable estimate, we recognized a tax benefit of $75.2 million, which is included as a component of income tax expense from continuing operations. In all cases, we will continue to make and refine our calculations as additional analysis is completed. In addition, our estimates may also be affected as we gain a more thorough understanding of the tax law. Due to the complexities involved in accounting for the enactment of the Act, the SEC Staff Accounting Bulletin No. 118 (“SAB No. 118”) allowed the Company to record provisional amounts in earnings for the year ended December 31, 2017. Where reasonable estimates can be made, the provisional accounting should be based on such estimates. When no reasonable estimate can be made, the provisional accounting may be based on the tax law in effect before the Act. The Company is required to complete its tax accounting for the Act within a one year period when it has obtained, prepared, and analyzed the information to complete the income tax accounting. Deferred tax assets and liabilities: We remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. However, we are still analyzing certain aspects of the Act and refining our calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The tax benefit recorded related to the remeasurement of our deferred tax balance was $75.2 million. The following is a reconciliation of our effective tax rate to the federal statutory tax rate:
| Years Ended December 31, |  |
| 2017 |  |  | 2016 |  |  | 2015 |  |
U.S. federal statutory rate |  | 34.9 |  | % |  | 35.0 |  | % |  | 35.0 |  | %
Federal tax law changes |  | (82.7 | ) |  |  | - |  |  |  | - |  |
State taxes, net of federal benefit |  | 2.8 |  |  |  | 2.6 |  |  | 2.4 |  |
Federal and state incentives |  | (5.2 | ) |  | (0.2) |  |  | (0.5) |  |
State law changes |  | 1.5 |  |  | 0.3 |  |  | (0.9) |  |
Permanent differences |  | 0.1 |  |  |  | 0.7 |  |  | 0.4 |  |
Net effective rate |  | (48.6 | ) | % |  | 38.4 |  | % |  | 36.4 |  | %
The following is a summary of our provision for income taxes (in thousands):
| Years Ended December 31, |
| 2017 |  |  | 2016 |  |  | 2015 |
Current |  |  |  |  |  |  |  |  |  |  |
Federal | $ | (2,429 | ) |  | $ | 30,324 |  |  | $ | 21,363 |
State and local |  | 1,718 |  |  |  | 3,296 |  |  |  | 2,900 |
Foreign |  | 59 |  |  |  | 108 |  |  |  | 284 |
|  | (652 | ) |  |  | 33,728 |  |  |  | 24,547 |
Deferred |  |  |  |  |  |  |  |  |  |  |
Federal |  | (46,247 | ) |  |  | 11,981 |  |  |  | 16,538 |
State and local |  | 2,686 |  |  |  | 971 |  |  |  | (346 | )
Foreign |  | (3 | ) |  |  | (64 | ) |  |  | (106 | )
|  | (43,564 | ) |  |  | 12,888 |  |  |  | 16,086 |
Total provision | $ | (44,216 | ) |  | $ | 46,616 |  |  | $ | 40,633 |
The following is a summary of our deferred tax assets and liabilities (in thousands):
| December 31, |
| 2017 |  |  | 2016 |
Accrued compensation |  | 9,441 |  |  |  | 20,651 |
Other reserves |  | 6,736 |  |  |  | 8,580 |
Tax credit carryforwards |  | 3,411 |  |  |  | 1,694 |
Operating loss carryforwards |  | 1,388 |  |  |  | 1,399 |
Total gross deferred income taxes |  | 20,976 |  |  |  | 32,324 |
Valuation allowances |  | (1,681 | ) |  |  | (456 | )
Total deferred tax assets |  | 19,295 |  |  |  | 31,868 |
Prepaids |  | (3,587 | ) |  |  | (3,401 | )
Other receivables |  | (2,462 | ) |  |  | (3,051 | )
Property and equipment |  | (79,224 | ) |  |  | (105,905 | )
Goodwill |  | (55,117 | ) |  |  | (84,170 | )
Total deferred tax liabilities |  | (140,390 | ) |  |  | (196,527 | )
Total deferred taxes | $ | (121,095 | ) |  | $ | (164,659 | )
We are subject to income taxation in the U.S., numerous state jurisdictions, Mexico and Canada. Because income tax return formats vary among the states, we file both unitary and separate company state income tax returns. Our state tax net operating losses of $1.4 million expire between December 31, 2018 and December 31, 2037. Our state incentive tax credit carryforwards of $3.4 million expire between December 31, 2019 and December 31, 2022. Management believes it is more likely than not that these deferred tax assets will be realized with the exception of $0.1 million related to state tax net operating losses, and $1.6 million related to state tax incentive credit carryforwards. Valuation allowances totaling $1.7 million have been established for each of these amounts. As of December 31, 2017 and December 31, 2016, the amount of unrecognized tax benefits was $3.8 million and $1.8 million, respectively. Of these amounts, our income tax provision would decrease $2.8 million and $1.2 million, respectively, if recognized. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
| 2017 |  |  | 2016 |
Gross unrecognized tax benefits - beginning of the year | $ | 1,832 |  |  | $ | 1,139 |
Gross increases related to prior year tax positions |  | 1,830 |  |  |  | 394 |
Gross increases related to current year tax positions |  | 290 |  |  |  | 488 |
Lapse of applicable statute of limitations |  | (125 | ) |  |  | (189 | )
Gross unrecognized tax benefits - end of year | $ | 3,827 |  |  | $ | 1,832 |
We estimate it is reasonably possible that our reserve could either increase or decrease by up to $1.0 million during the next twelve months. We recognize interest expense and penalties related to income tax liabilities in our provision for income taxes. In our 2017 provision for income taxes, we recognized approximately three thousand dollars of expense for combined income tax interest and income tax penalty. In 2017, we were selected for examinations by Illinois for our 2014 and 2015 tax years, by Michigan for our 2012 through 2015 tax years, by Minnesota for our 2013 through 2015 tax years and by Massachusetts for our 2013 through 2015 tax years. In addition, examinations that began in 2016 by the IRS for our 2014 year and California for our 2012 and 2013 years continued in 2017. The Minnesota and California examinations are still ongoing. The Massachusetts audit was settled for approximately $10,000, and the Illinois, Michigan and IRS audits closed with no additional tax due.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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