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Note 8 - Income Taxes
 12 Months Ended
Dec. 31, 2021
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

Note 8 – Income Taxes

 

The components of Income before income taxes are:

 

  

2021

  

2020

  

2019

 

United States

 $30,973  $28,493  $41,234 

Foreign countries

  6,275   2,753   3,932 

Total

 $37,248  $31,246  $45,166 

 

The components of income tax expense are:

 

  

2021

  

2020

  

2019

 

Current expense:

            

Federal

 $5,174  $4,058  $8,204 

Foreign

  1,087   353   1,140 

State and local

  1,086   1,103   1,205 
  $7,347  $5,514  $10,549 

Deferred expense (benefit):

            

Federal

 $60  $728  $(720)

Foreign

  48   (349)  (379)

State and local

  (58)  165   (99)
   50   544   (1,198)

Income tax expense

 $7,397  $6,058  $9,351 

 

The reconciliation between income tax expense and the amount computed by applying the statutory federal income tax rate to income before income taxes is:

 

  

2021

  

2020

  

2019

 

Income taxes at statutory rate

 $7,822  $6,562  $9,485 

State and local income taxes, net of federal tax benefit

  898   711   803 

Tax credits

  (1,052)  (808)  (898)

Uncertain tax positions

  (26)  42   164 

Valuation allowance

  (86)  -   71 

Other

  (159)  (449)  (274)

Income tax expense

 $7,397  $6,058  $9,351 

 

 

The Company made income tax payments of $7.9 million, $6.2 million, and $9.1 million in 2021, 2020, and 2019, respectively.

 

Deferred income tax assets and liabilities consist of:

 

  

2021

  

2020

 

Deferred tax assets:

        

Inventories

 $-  $646 

Accrued liabilities

  1,900   1,484 

Postretirement health benefits obligation

  6,724   6,815 

Pension

  1,745   1,688 

Lease liabilities

  272   390 

Other

  1,531   1,434 

Total deferred tax assets

  12,172   12,457 

Valuation allowance

  (481)  (567)

Net deferred tax assets

  11,691   11,890 

Deferred tax liabilities:

        

Depreciation and amortization

  (9,817)  (9,536)

Leases – right of use assets

  (269)  (388)

Foreign withholding tax

  -   (100)

Inventories

  (628)  - 

Total deferred tax liabilities

  (10,714)  (10,024)

Net deferred tax assets

 $977  $1,866 

 

The Company had state tax credit carryforwards of $0.6 million and $0.7 million as of December 31, 2021 and 2020, respectively, which will expire incrementally between 2022 and 2035.

 

The Company had valuation allowances of $0.5 million and $0.6 million as of December 31, 2021 and 2020, respectively, 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 $0.8 million and $0.9 million at December 31, 2021 and 2020, respectively. The total amount of unrecognized tax benefits that, if ultimately recognized, would reduce the Company’s annual effective tax rate were $0.7 million at both December 31, 2021 and 2020.

 

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

 

  

2021

  

2020

  

2019

 

Balance at beginning of year

 $878  $1,130  $951 

Additions based on tax positions related to the current year

  153   177   372 

Reductions due to lapse of applicable statute of limitations

  (96)  (139)  (193)

Settlements

  (127)  (290)  - 

Balance at end of year

 $808  $878  $1,130 

 

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 2017.

 

The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense for all periods presented. The Company accrued approximately $0.2 million, $0.2 million and $0.3 million for the payment of interest and penalties at December 31, 2021, 2020 and 2019, respectively.