Income Taxes

12 Months Ended

Dec. 31, 2020

13. Income Taxes

The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal and state income tax examinations by tax authorities for years before 2017.

The federal and state income tax provision consisted of the following:

Year ended December 31,		2020				2019					2018
		Current		Deferred		Current		Deferred			Current		Deferred
Federal	$	20,201	$	3,696	$	10,705	$	(1,911	)	$	17,574	$	(3,265	)
State		6,519		167		2,455		(513	)		3,859		(387	)
	$	26,720	$	3,863	$	13,160	$	(2,424	)	$	21,433	$	(3,652	)

The effective income tax rate varied from the statutory federal income tax rate as follows:

Year ended December 31,	2020		2019		2018
Statutory federal income tax rate	21.0	%	21.0	%	21.0	%
State income taxes, net of federal tax benefit	4.4		3.6		4.0
Other items	(0.1	)	0.4		0.9
Effective income tax rate	25.3	%	25.0	%	25.9	%

The Tax Cuts and Jobs Act of 2017 lowered the statutory corporate tax rate from 35% to 21% for years beginning after December 31, 2017. The Company estimates that its effective tax rate in 2021 will approximate 25%.

Table of Contents

Significant components of the Company’s deferred tax assets and liabilities are as follows:

December 31,	2020		2019
Deferred tax assets
Product Liability	$	285	$	203
Employee compensation and benefits		2,548		2,263
Allowances for doubtful accounts and discounts		445		3,761
Inventories		954		978
Stock-based compensation		3,353		3,064
Other		1,443		1,637
Total deferred tax assets		9,028		11,906
Deferred tax liabilities:
Depreciation		6,638		5,631
Other		860		882
Total deferred tax liabilities		7,498		6,513
Net deferred tax assets	$	1,530	$	5,393

The Company made income tax payments of approximately $30.6 million, $16.0 million, and $18.1 million, during 2020, 2019, and 2018, respectively. The Company expects to realize its deferred tax assets through tax deductions against future taxable income.

The Company does not believe it has included any “uncertain tax positions” in its federal income tax return or any of the state income tax returns it is currently filing. The Company has made an evaluation of the potential impact of additional state taxes being assessed by jurisdictions in which the Company does not currently consider itself liable. The Company does not anticipate that such additional taxes, if any, would result in a material change to its financial position.

- 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.

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