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Income Taxes | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income Tax Disclosure | INCOME TAXES The provision (benefit) for income taxes for the years ended December 31, 2015, 2016 and 2017 consisted of the following (in thousands):
| Year Ended December 31,
| 2015 |  | 2016 |  | 2017
Current: |  |  |  |  |
U. S. federal provision | $ | 9,840 |  |  | $ | 6,609 |  |  | $ | 6,425 |
State provision | 862 |  |  | 1,195 |  |  | 815 |
Total current provision | $ | 10,702 |  |  | $ | 7,804 |  |  | $ | 7,240 |
Deferred: |  |  |  |  |
U. S. federal provision (benefit) | $ | 1,928 |  |  | $ | 3,475 |  |  | $ | (12,881 | )
State provision | 1,107 |  |  | 1,381 |  |  | 1,230 |
Total deferred provision (benefit) | $ | 3,035 |  |  | $ | 4,856 |  |  | $ | (11,651 | )
Total income tax provision (benefit) | $ | 13,737 |  |  | $ | 12,660 |  |  | $ | (4,411 | )
A reconciliation of taxes calculated at the U.S. federal statutory rate to those reflected in the Consolidated Statements of Operations for the years ended December 31, 2015, 2016 and 2017 is as follows (dollars in thousands):
| Year Ended December 31, |
| 2015 |  | 2016 |  | 2017 |
| Amount |  | Percent |  | Amount |  | Percent |  | Amount |  | Percent |
Federal statutory rate | $ | 12,105 |  |  | 35.0 |  | % | $ | 11,300 |  |  | 35.0 | % | $ | 11,474 |  |  | 35.0 |  | %
Effect of state income taxes, net of federal benefit | 1,618 |  |  | 4.7 |  |  | 1,127 |  |  | 3.5 |  | 1,304 |  |  | 4.0 |  |
Effect of non-deductible expenses and other, net | 155 |  |  | 0.4 |  |  | 213 |  |  | 0.7 |  | (36 | ) |  | (0.1 | ) |
Change in valuation allowance | (141 | ) |  | (0.4 | ) |  | 20 |  |  | 0.1 |  | 23 |  |  | 0.1 |  |
Re-measurement of deferred taxes due to tax reform | — |  |  | — |  |  | — |  |  | — |  | (17,176 | ) |  | (52.4 | ) |
Total | $ | 13,737 |  |  | 39.7 |  | % | $ | 12,660 |  |  | 39.3 | % | $ | (4,411 | ) |  | (13.5 | ) | %
On August 15, 2016, we settled an open examination with the California Franchise Tax Board. As a result of paying the final assessment, we re-measured our tax liability for unrecognized tax benefits reflecting a reduction to our liability of $0.2 million. On August 29, 2016, we received notification that the IRS completed its examination of our tax year ended December 31, 2013. As a result, we re-measured our tax liability for unrecognized tax benefits reflecting a reduction to our liability of $0.6 million, which resulted in an increase to Deferred tax liability in the amount of $0.6 million. On May 10, 2017, we filed amended federal returns for the tax years ending December 31, 2013, 2014 and 2015, which generated significant refunds. As a result, on July 18, 2017, we received notification that the IRS selected our tax years ended December 31, 2013, 2014 and 2015 for a limited scope examination to verify the refunds due. The examinations are expected to conclude during 2018. The federal statute is still open for our 2015 and 2016 tax years. We do not have any unrecognized tax benefits recorded as of December 31, 2017 and we do not anticipate a material change in our unrecognized tax benefits during the next twelve months. The tax effects of temporary differences from total operations that give rise to significant deferred tax assets and liabilities at December 31, 2016 and 2017 were as follows (in thousands):
| Year Ended December 31,
| 2016 |  | 2017
Deferred income tax assets: |  |  |
Net operating loss carryforwards | $ | 1,947 |  |  | $ | 1,978 |
Tax credit carryforwards | 135 |  |  | 133 |
State bonus depreciation | 373 |  |  | 494 |
Accrued liabilities and other | 11,163 |  |  | 6,136 |
Amortization of non-compete agreements | 1,433 |  |  | 873 |
Preneed liabilities, net | 9,315 |  |  | 5,239 |
Total deferred income tax assets | 24,366 |  |  | 14,853 |
Less valuation allowance | (209 | ) |  | (244 | )
Total deferred income tax assets | $ | 24,157 |  |  | $ | 14,609 |
Deferred income tax liabilities: |  |  |
Depreciation and amortization | $ | (57,716 | ) |  | $ | (41,447 | )
Convertible subordinated notes due 2021 | (8,636 | ) |  | (4,096 | )
Prepaids and other | (615 | ) |  | (225 | )
Total deferred income tax liabilities | (66,967 | ) |  | (45,768 | )
Total net deferred tax liabilities | $ | (42,810 | ) |  | $ | (31,159 | )
Current deferred tax asset | $ | — |  |  | $ | — |
Non-current deferred tax liabilities | (42,810 | ) |  | (31,159 | )
Total net deferred tax liabilities | $ | (42,810 | ) |  | $ | (31,159 | )
Our deferred tax assets and liabilities, along with related valuation allowances are classified as non-current on our Consolidated Balance Sheets at December 31, 2016 and 2017. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Act. The Tax Act makes broad and complex changes to the U.S. tax code that will affect 2017, including but not limited to bonus depreciation changes that will allow for full expensing of qualified property placed in service on or after September 27, 2017. The Tax Act also establishes new tax laws that will affect 2018, including but not limited to (1) a reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%; (2) a limitation of the tax deduction for interest expense to 30% of adjusted earnings (except for certain small businesses); (3) a limitation of the deduction for net operating losses to 80% of current year taxable income and elimination of net operating loss carrybacks; (4) immediate deductions for certain new investments (instead of deductions for depreciation expense over time); (5) limitations of certain executive compensation deductions; and (6) limitations or repeals of many business deductions and credits. The SEC staff issued SAB 118, which provides guidance on accounting for the effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provision estimate in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. Our analysis of the impact of the Tax Act is complete. The Tax Act reduces the corporate tax rate to 21% and as a result we have recorded a decrease in our net deferred tax liability and a corresponding discrete tax benefit item of $17.2 million. In addition to the rate reduction, approximately $2.9 million of qualifying assets placed in service on or after September 27, 2017 have been fully expensed as of December 31, 2017. We record a valuation allowance to reflect the estimated amount of deferred tax assets for which realization is uncertain. Management reviews the valuation allowance at the end of each quarter and makes adjustments if it is determined that it is more likely than not that the tax benefits will be realized. We recognized an immaterial net increase in our valuation allowance during 2017 and 2016. For federal income tax reporting purposes, we have no net operating loss carryforwards. For state reporting purposes, we have approximately $36.4 million of net operating loss carryforwards that will expire between 2018 and 2037, if not utilized. Based on management’s assessment of the various state net operating losses, it was determined that it is more likely than not that we will be able to realize tax benefits on some portion of the amount of the state losses. The valuation allowance at December 31, 2017 was attributable to the deferred tax asset related to a portion of the state operating losses. We analyze tax benefits for uncertain tax positions and how they are to be recognized, measured, and derecognized in financial statements; provide certain disclosures of uncertain tax matters; and specify how reserves for uncertain tax positions should be classified on the Consolidated Balance Sheets. During 2017, the re-measurement of deferred tax liabilities due to tax reform resulted in no change to our uncertain tax positions. At December 31, 2017, no uncertain tax positions were identified and we do not anticipate a material change to our unrecognized tax benefits during the next twelve months. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
| Year Ended December 31,
| 2015 |  | 2016 |  | 2017
Unrecognized tax benefit at beginning of year | $ | 515 |  |  | $ | 814 |  |  | $ | — |
Reductions based on tax positions related to the prior year | — |  |  | (17 | ) |  | — |
Reductions for tax year 2011 federal audit | — |  |  | (568 | ) |  | — |
Additions (reductions) based on tax positions related to the current year | 299 |  |  | (229 | ) |  | — |
Reductions as a result of a lapse of the applicable statute of limitations | — |  |  | — |  |  | — |
Unrecognized tax benefit at end of year | $ | 814 |  |  | $ | — |  |  | $ | — |

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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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