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Income Taxes | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Income Taxes |
13. | Income Taxes
The components of income (loss) from continuing operations before provision for income taxes consisted of the following (in thousands):
|  | Years Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
United States |  | $ | 112,425 |  |  | $ | 119,446 |  |  | $ | 100,031 |
Foreign |  |  | (4,913 | ) |  |  | (2,226 | ) |  |  | (805 | )
|  | $ | 107,512 |  |  | $ | 117,220 |  |  | $ | 99,226 |
The provision ( benefit ) for income taxes consisted of the following (in thousands):
|  | Years Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
Federal: |  |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | 22,638 |  |  | $ | 24,101 |  |  | $ | 28,993 |
Deferred |  |  | 665 |  |  |  | (268 | ) |  |  | 13,249 |
|  | $ | 23,303 |  |  | $ | 23,833 |  |  | $ | 42,242 |
State: |  |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | 7,718 |  |  | $ | 6,004 |  |  | $ | 5,883 |
Deferred |  |  | (507 | ) |  |  | 162 |  |  |  | (423 | )
|  | $ | 7,211 |  |  | $ | 6,166 |  |  | $ | 5,460 |
Foreign: |  |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | — |  |  | $ | — |  |  | $ | — |
Deferred |  |  | 68 |  |  |  | (36 | ) |  |  | — |
|  | $ | 68 |  |  | $ | (36 | ) |  | $ | — |
|  | $ | 30,582 |  |  | $ | 29,963 |  |  | $ | 47,702 |
Significant components of the Company’s deferred tax assets, net consisted of the following (in thousands):
|  | December 31, |
|  | 2019 |  |  | 2018 |
Deferred Tax Assets: |  |  |  |  |  |  |  |
Accrued expenses and bonuses |  | $ | 2,481 |  |  | $ | 2,258 |
Bad debt and other reserves |  |  | 2,744 |  |  |  | 1,840 |
Deferred compensation |  |  | 13,346 |  |  |  | 13,337 |
Operating lease ROU assets, net |  |  | 21,761 |  |  |  | — |
Stock-based compensation |  |  | 7,847 |  |  |  | 8,912 |
Deferred rent |  |  | — |  |  |  | 1,470 |
Net operating and capital loss carryforwards |  |  | 3,612 |  |  |  | 2,335 |
Other comprehensive income |  |  | — |  |  |  | 330 |
State taxes |  |  | 139 |  |  |  | 11 |
Other |  |  | 328 |  |  |  | 25 |
Deferred tax assets before valuation allowance |  |  | 52,258 |  |  |  | 30,518 |
Valuation allowance |  |  | (3,921 | ) |  |  | (2,570 | )
Deferred Tax Assets |  | $ | 48,337 |  |  | $ | 27,948 |
Deferred Tax Liabilities: |  |  |  |  |  |  |  |
Fixed assets |  | $ | (4,422 | ) |  | $ | (4,086 | )
Operating lease liabilities |  |  | (20,117 | ) |  |  | — |
Prepaid expenses |  |  | (940 | ) |  |  | (789 | )
Other comprehensive income |  |  | (552 | ) |  |  | — |
Other |  |  | (184 | ) |  |  | (114 | )
Deferred Tax Liabilities |  |  | (26,215 | ) |  |  | (4,989 | )
Deferred Tax Assets, Net |  | $ | 22,122 |  |  | $ | 22,959 |
As of December 31, 2019, and 2018, the Company had state and Canadian net operating loss carryforwards of approximately $14.0 million and $9.4 million, respectively, principally all of which will begin to expire in 2033. A valuation allowance is required when it is more-likely-than not that all or a portion of a deferred tax asset will not be realized. Realization of a deferred tax asset is dependent upon taxable income in prior carryback years, estimates of future taxable income, tax planning strategies and reversals of existing taxable temporary differences. The Company determined that as of December 31, 2019 and 2018, $3.9 million and $2.6 million, respectively, of the deferred tax assets related to state and Canadian losses do not satisfy the recognition criteria. The Company has therefore recorded a valuation allowance for this amount. The valuation allowance for deferred tax assets was increased by $1.4 million, $677,000 and $170,000 during 2019, 2018 and 2017, respectively. The increases are primarily related to the Company’s Canadian operations. The provision for income taxes differs from the amount computed by applying the statutory federal corporate income tax rate to income before provision for income taxes and consisted of the following (dollars in thousands):
|  | Years Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
|  | Amount |  |  | Rate |  |  | Amount |  |  | Rate |  |  | Amount |  |  | Rate |
Income tax expense at the federal statutory rate |  | $ | 22,578 |  |  |  | 21.0 | % |  | $ | 24,616 |  |  |  | 21.0 | % |  | $ | 34,729 |  |  |  | 35.0 | %
State income tax expense, net of federal benefit |  |  | 5,698 |  |  |  | 5.3 | % |  |  | 4,550 |  |  |  | 3.9 | % |  |  | 3,577 |  |  |  | 3.6 | %
Wind fall tax benefits, net related to stock-based compensation |  |  | (196 | ) |  |  | (0.2 | )% |  |  | (1,535 | ) |  |  | (1.3 | )% |  |  | (2,568 | ) |  |  | (2.6 | )%
Change in valuation allowance |  |  | 1,351 |  |  |  | 1.3 | % |  |  | 677 |  |  |  | 0.6 | % |  |  | 170 |  |  |  | 0.2 | %
Effect of rate and other changes on federal deferred taxes, net due to enactment of Tax Cuts and Jobs Act (“the Act”) (1) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 11,644 |  |  |  | 11.7 | %
Permanent and other items (2) |  |  | 1,151 |  |  |  | 1.0 | % |  |  | 1,655 |  |  |  | 1.4 | % |  |  | 150 |  |  |  | 0.2 | %
|  | $ | 30,582 |  |  |  | 28.4 | % |  | $ | 29,963 |  |  |  | 25.6 | % |  | $ | 47,702 |  |  |  | 48.1 | %
(1) | On December 22, 2017, the Act was enacted, which significantly changed the U.S. corporate income tax laws by, among other items, reducing the U.S. corporate income tax rate to 21% from 35% starting in 2018, further limiting 162(m) deductions and creating a territorial tax system with a one-time mandatory tax on previously deferred foreign earnings of U.S. subsidiaries. As a result of the Act, the Company revalued its deferred taxes, net due to the changes in the U.S. corporate statutory federal income tax rate and recorded a net charge of $11.6 million in the provision for income taxes in 2017. The Company’s accounting for income tax effects of the Act was completed as of December 31, 2018.
(2) | Permanent items relate principally to compensation charges, qualified transportation fringe benefits, reversal of uncertain tax positions and meals and entertainment.
A reconciliation of the beginning and ending amounts of unrecognized tax benefits consisted of the following (in thousands):
|  | Years Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
Beginning balance |  | $ | 1,246 |  |  | $ | — |  |  | $ | — |
Gross increase (decrease) as a result of positions taken: |  |  |  |  |  |  |  |  |  |  |  |
Prior periods |  |  | — |  |  |  | 1,246 |  |  |  | — |
Current period |  |  | — |  |  |  | — |  |  |  | — |
Settlement with tax authorities |  |  | — |  |  |  | — |  |  |  | — |
Expiration of applicable statutes of limitation |  |  | (471 | ) |  |  | — |  |  |  | — |
Ending balance |  | $ | 775 |  |  | $ | 1,246 |  |  | $ | — |
It is reasonably possible that the unrecognized tax benefits balance may decrease by $701,000 during the next 12 months due to the expiration of the statute of limitations. During the years ended December 31, 2019 and 2018, penalties of $136,000 and $167,000, respectively, were recorded relating to unrecognized tax benefits. The Company is subject to tax in various jurisdictions and, as a matter of ordinary course, the Company may be subject to income tax examinations by the federal, state and foreign taxing authorities for the tax years 2015 to 2019. The Company is not currently under income tax examination by any taxing authority. The Company has not provided for U.S. taxes on unremitted earnings of its foreign subsidiary as this subsidiary is operating at a loss and has no earnings and profits to remit. As a result, deferred taxes were not provided related to the cumulative translation adjustments.

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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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