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Note 8 - Income Taxes | 12 Months Ended
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Dec. 31, 2019
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | Note 8 – Income Taxes On December 22, 2017, the United States enacted the tax reform legislation referred to herein as the “Tax Act”, which reduced the federal corporate tax rate on U.S. earnings to 21% from 35% and moved from a global taxation regime to a modified territorial regime. The change in the Company’s lower effective income tax rate of 20.7% for 2019 and 20.5% for 2018 compared to 32.6% for 2017 was due primarily to the Tax Act. In January 2018, FASB released guidance on accounting for the global intangible low-taxed income (“GILTI”) tax. The guidance indicates that either accounting for deferred taxes related to GILTI tax inclusions or treating the GILTI tax as a period cost are both acceptable methods subject to an accounting policy election. The Company elected to account for the GILTI tax in the period in which it is incurred. The components of Income before income taxes are:
|  | 2019 |  |  | 2018 |  |  | 2017 |
United States |  | $ | 41,234 |  |  | $ | 45,271 |  |  | $ | 33,277 |
Foreign countries |  |  | 3,932 |  |  |  | 5,045 |  |  |  | 6,101 |
Total |  | $ | 45,166 |  |  | $ | 50,316 |  |  | $ | 39,378 |
The components of income tax expense are:
|  | 2019 |  |  | 2018 |  |  | 2017 |
Current expense: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 8,204 |  |  | $ | 7,779 |  |  | $ | 16,489 |
Foreign |  |  | 1,140 |  |  |  | 1,179 |  |  |  | 1,243 |
State and local |  |  | 1,205 |  |  |  | 1,042 |  |  |  | 1,231 |
|  |  | 10,549 |  |  |  | 10,000 |  |  |  | 18,963 |
Deferred expense (benefit): |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (720 | ) |  |  | 405 |  |  |  | (5,968 | )
Foreign |  |  | (379 | ) |  |  | (125 | ) |  |  | 51 |
State and local |  |  | (99 | ) |  |  | 57 |  |  |  | (223 | )
|  |  | (1,198 | ) |  |  | 337 |  |  |  | (6,140 | )
Income tax expense |  | $ | 9,351 |  |  | $ | 10,337 |  |  | $ | 12,823 |
The reconciliation between income tax expense and the amount computed by applying the statutory federal income tax rate to income before income taxes is:
|  | 201 9 |  |  | 201 8 |  |  | 201 7 |
Income taxes at statutory rate |  | $ | 9,485 |  |  | $ | 10,566 |  |  | $ | 13,782 |
State and local income taxes, net of federal tax benefit |  |  | 803 |  |  |  | 832 |  |  |  | 555 |
Tax credits |  |  | (898 | ) |  |  | (506 | ) |  |  | (295 | )
Domestic production activities deduction |  |  | - |  |  |  | - |  |  |  | (1,191 | )
Lower foreign taxes differential |  |  | (65 | ) |  |  | (5 | ) |  |  | (842 | )
Uncertain tax positions |  |  | 164 |  |  |  | 172 |  |  |  | 346 |
Valuation allowance |  |  | 71 |  |  |  | 37 |  |  |  | 100 |
Federal tax reform – deferred rate change |  |  | - |  |  |  | (581 | ) |  |  | (1,624 | )
Deemed mandatory repatriation |  |  | - |  |  |  | (48 | ) |  |  | 1,370 |
Foreign withholding tax |  |  | - |  |  |  | - |  |  |  | 600 |
Other |  |  | (209 | ) |  |  | (130 | ) |  |  | 22 |
Income tax expense |  | $ | 9,351 |  |  | $ | 10,337 |  |  | $ | 12,823 |
The Company made income tax payments of $9.1 million, $14.7 million, and $13.5 million in 2019, 2018, and 2017, respectively. Deferred income tax assets and liabilities consist of:
|  | 2019 |  |  | 2018 |
Deferred tax assets: |  |  |  |  |  |  |  |
Inventories |  | $ | 1,391 |  |  | $ | 1,161 |
Accrued liabilities |  |  | 2,095 |  |  |  | 2,306 |
Postretirement health benefits obligation |  |  | 5,884 |  |  |  | 5,350 |
Pension |  |  | 240 |  |  |  | - |
Lease liabilities |  |  | 361 |  |  |  | - |
Other |  |  | 1,360 |  |  |  | 840 |
Total deferred tax assets |  |  | 11,331 |  |  |  | 9,657 |
Valuation allowance |  |  | (567 | ) |  |  | (496 | )
Net deferred tax assets |  |  | 10,764 |  |  |  | 9,161 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | (9,446 | ) |  |  | (9,351 | )
Leases – right of use assets |  |  | (361 | ) |  |  | - |
Pension |  |  | - |  |  |  | (1,113 | )
Foreign withholding tax |  |  | (100 | ) |  |  | (600 | )
Total deferred tax liabilities |  |  | (9,907 | ) |  |  | (11,064 | )
Net deferred tax assets (liabilities) |  | $ | 857 |  |  | $ | (1,903 | )
The Company has state tax credit carryforwards of $0.7 million and $0.6 million as of December 31, 2019 and 2018, respectively, that will expire incrementally between 2020 and 2024. The Company has a valuation allowance of $0.6 million as of December 31, 2019 and $0.5 million as of December 31, 2018 against certain of its deferred tax assets. ASC 740, “Income Taxes,” requires that a valuation allowance be recorded against deferred tax assets when it is more likely than not that some or all of a Company’s deferred tax assets will not be realized based on available positive and negative evidence. Total unrecognized tax benefits were $1.1 million and $1.0 million at December 31, 2019 and 2018, respectively. The total amount of unrecognized tax benefits that, if ultimately recognized, would reduce the Company’s annual effective tax rate were $0.9 million and $0.8 million at December 31, 2019 and 2018, respectively. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
|  | 201 9 |  |  | 201 8 |  |  | 201 7 |
Balance at beginning of year |  | $ | 951 |  |  | $ | 797 |  |  | $ | 492 |
Additions based on tax positions related to the current year |  |  | 372 |  |  |  | 268 |  |  |  | 239 |
Additions based on tax positions related to prior years |  |  | - |  |  |  | - |  |  |  | 165 |
Reductions due to lapse of applicable statute of limitations |  |  | (193 | ) |  |  | (114 | ) |  |  | (99 | )
Balance at end of year |  | $ | 1,130 |  |  | $ | 951 |  |  | $ | 797 |
The Company is subject to income taxes in the U.S. federal and various state, local and foreign jurisdictions. Income tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for the years before 2015. The Company has $57,000 of unrecognized tax benefits recorded for periods for which the relevant statutes of limitations expire in the next 12 months. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense for all periods presented. The Company accrued approximately $0.3 million, $0.2 million and $0.2 million for the payment of interest and penalties at December 31, 2019, 2018 and 2017, respectively.

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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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