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INCOME TAXES | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The components of income before income taxes were as follows (in thousands):
| Years Ended December 31,
| 2019 |  | 2018 |  | 2017
Domestic | $ | 41,184 |  |  | $ | 46,270 |  |  | $ | 13,183 |
Foreign | 5,485 |  |  | 2,436 |  |  | 3,709 |
Total income before taxes | $ | 46,669 |  |  | $ | 48,706 |  |  | $ | 16,892 |
The provision for income taxes consisted of the following (in thousands):
| Years Ended December 31,
| 2019 |  | 2018 |  | 2017
Current - |  |  |  |  |
Federal | $ | 4,940 |  |  | $ | 7,295 |  |  | $ | 1,400 |
State | 1,862 |  |  | 2,257 |  |  | 698 |
Foreign | 2,982 |  |  | 2,629 |  |  | 2,092 |
| 9,784 |  |  | 12,181 |  |  | 4,190 |
Deferred - |  |  |  |  |  |  |  |
Federal | 2,618 |  |  | 2,389 |  |  | 686 |
State | (224 | ) |  | 123 |  |  | (464 | )
Foreign | (1,284 | ) |  | (1,508 | ) |  | (4,049 | )
| 1,110 |  |  | 1,004 |  |  | (3,827 | )
| $ | 10,894 |  |  | $ | 13,185 |  |  | $ | 363 |
The difference between income taxes computed at the statutory income tax rate and the provision for income taxes is as follows (in thousands):
| Years Ended December 31,
| 2019 |  | 2018 |  | 2017
Income taxes computed at federal statutory rate | $ | 9,801 |  |  | $ | 10,228 |  |  | $ | 5,912 |
State income taxes, net of federal benefit | 1,294 |  |  | 1,880 |  |  | 152 |
Foreign taxes | 311 |  |  | 150 |  |  | (1,077 | )
Nondeductible expenses | 1,108 |  |  | 954 |  |  | 642 |
Domestic production activity deduction | — |  |  | — |  |  | (98 | )
Research and development tax credit | (2,324 | ) |  | (480 | ) |  | (641 | )
Foreign tax credit | (57 | ) |  | (346 | ) |  | — |
Valuation allowance | (5 | ) |  | — |  |  | (791 | )
Tax reform deferred tax remeasurement | — |  |  | 81 |  |  | (1,294 | )
Deferred tax liability true up | 1,065 |  |  | — |  |  | (2,180 | )
Uncertain tax positions | 665 |  |  | 172 |  |  | — |
Other | (964 | ) |  | 546 |  |  | (262 | )
| $ | 10,894 |  |  | $ | 13,185 |  |  | $ | 363 |
On December 22, 2017, the Tax Cuts and Jobs Act (“The Act”) was enacted into law. The majority of the provisions signed into law in 2017 did not take effect until January 1, 2018. The Act is a comprehensive tax reform legislation that contains significant changes to corporate taxation, of which the reduction in the corporate tax rate from 35.0% to 21.0% and the imposition of Global Intangible Low - Taxable Income ("GILTI") had the most impact to the Company. The Company analyzed other provisions of The Act such as limitation on business interest expense, limitation on net operating losses to 80% of taxable income each year, limitation on officer compensation, mandatory repatriation and transition tax, Base Erosion & Anti–Abuse Tax ("BEAT"), and Foreign–Derived Intangible Income Deduction ("FDII") and determined these provisions to have minimal to no impact on the Company. In accordance with Staff Accounting Bulletin No. 18 (SAB 118) issued by the Securities and Exchange Commission on December 22, 2017, companies are allowed a one year measurement period to complete the accounting related to The Act. Specifically, SAB 118 permits companies to record a provisional amount which can be remeasured during the measurement period due to obtaining, preparing, or analyzing additional information about facts and circumstances that existed as of the enacted date. As a result, we remeasured our net deferred income tax liabilities by a provisional $1.3 million benefit and a corresponding provisional decrease in the net deferred tax liability as of December 31, 2017. The net deferred tax liability remeasurement analysis was completed as of December 31, 2018, impacting the Company's provision for income taxes less than $0.1 million. As of December 31, 2018, the Company has completed its accounting for the income tax effects of The Act. The Act subjects a U.S. shareholder to current tax on GILTI earned by certain foreign subsidiaries. Pursuant to FASB Staff Q&A, Topic 740, No. 5 Accounting for Global Intangible Low-Taxed Income, the Company has adopted an accounting policy to recognize the tax effects of GILTI in the year tax is incurred. The Company recorded a GILTI inclusion of $2.3 million, which is partially offset with GILTI foreign tax credits, resulting in a net liability of $0.1 million as of December 31, 2018. For the year ended December 31, 2019, the effective tax rate was impacted by state taxes, foreign taxes, nondeductible expenses, research and development tax credits, and foreign tax credits. Deferred tax liabilities and assets were comprised of the following (in thousands):
| December 31,
| 2019 |  | 2018
Deferred tax assets: |  |  |
Allowance for doubtful accounts | 1,657 |  |  | 1,948 |
Inventories | 3,254 |  |  | 2,944 |
Research and development credit carryforward | 1,361 |  |  | 775 |
Foreign tax credit carryforward | 64 |  |  | 64 |
Net operating loss carryforward | 812 |  |  | 610 |
Capital loss carryforward | 12,363 |  |  | 12,564 |
Deferred compensation | — |  |  | 538 |
Accruals | 4,077 |  |  | 576 |
Investment in partnerships | 500 |  |  | — |
Other | — |  |  | 137 |
Total deferred tax assets | 24,088 |  |  | 20,156 |
Less valuation allowance | (12,363 | ) |  | (12,564 | )
Total deferred tax asset, net of valuation deferred tax liabilities : | 11,725 |  |  | 7,592 |
Goodwill | (8,459 | ) |  | (1,053 | )
Intangibles | (2,051 | ) |  | (7,820 | )
Property and equipment | (8,319 | ) |  | (6,807 | )
Unremitted foreign earnings | (421 | ) |  | (421 | )
Deferred compensation | (317 | ) |  | — |
Method changes | (1,961 | ) |  | — |
Other | (69 | ) |  | (124 | )
Net deferred tax liability | $ | (9,872 | ) |  | $ | (8,633 | )
The Company records a valuation allowance when it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets depends on the ability to generate sufficient taxable income of the appropriate character in the future and in the appropriate taxing jurisdictions. If the Company was to determine that it would be able to realize the deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the valuation allowance, which would reduce the provision for income taxes. At December 31, 2019, the Company had $51.1 million of capital loss carryforward, which will expire in 2021. The Company has recorded a valuation allowance for all of this carryforward amount. The valuation allowance represents a provision for uncertainty as to the realization of the tax benefits of these carryforwards. To the extent penalties and interest would be assessed on any underpayment of income tax, such accrued amounts are classified as a component of income tax provision (benefit) in the consolidated financial statements consistent with the Company’s policy. For the year ended December 31, 2019, the Company recorded $0.7 million tax expense for interest and penalties related to uncertain tax positions. The Company is subject to taxation in the United States, various states, and foreign jurisdictions. The Company has significant operations in the United States and Canada and to a lesser extent in various other international jurisdictions. Tax years that remain subject to examination vary by legal entity but are generally open in the United States for the tax years ending after 2012 and outside the United States for the tax years ending after 2011.

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