XML 28 R15.htm IDEA: XBRL DOCUMENT v3.20.4
Income Taxes
 12 Months Ended
Dec. 31, 2020
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income tax provision (benefits) are summarized as follows:
Year Ended December 31,
(In thousands)202020192018
Current:
Federal$(371)$(371)$(741)
State— — — 
Total current tax benefit$(371)$(371)$(741)
Deferred:
Federal$430 $(1,475)$9,872 
State2 (30)508 
Total deferred tax provision (benefit)432 (1,505)10,380 
Income tax provision (benefit)$61 $(1,876)$9,639 
Reconciliation of the statutory federal income tax rate to the Company’s actual rate based on income (loss) before income tax provision (benefit) is summarized as follows:
Year Ended December 31,
202020192018
Statutory federal tax rate21.00 %21.00 %21.00 %
State income taxes, net of federal income taxes0.89 1.20 4.50 
Permanent tax differences – stock compensation(0.43)(0.70)22.00 
Permanent tax differences – business meals(0.07)(0.90)(5.00)
Permanent tax differences – executive compensation and other(0.86)— (0.20)
Purchase price allocation adjustment – merger— 5.90 — 
Change in valuation allowance(19.09)(32.30)(144.50)
FICA credit generated0.33 2.80 8.50 
Impact of Tax Cuts and Jobs Act— — (4.80)
Impact of ASC 842— 7.70 — 
Change in tax rate and apportionment0.11 (0.30)(4.30)
Deferred only adjustment to beginning deferred balances(1.92)0.10 17.30 
Effective tax rate(0.04)%4.50 %(85.50)%
The Company’s current and non-current deferred tax assets (liabilities) are comprised of the following:
December 31,
(In thousands)20202019
Deferred tax assets:
Accruals and reserves$4,315 $5,346 
Share-based compensation expense5,469 4,958 
Alternative minimum tax credit carryforward— 371 
General business credit carryforward4,500 3,936 
State tax credits5,500 5,500 
Net operating loss carryforwards42,146 27,269 
Operating lease obligation42,039 46,525 
Amortization of intangible assets1,073 — 
Other647 583 
105,689 94,488 
Valuation allowances(62,724)(36,652)
$42,965 $57,836 
Deferred tax liabilities:
Prepaid services$(715)$(288)
Amortization of intangible assets— (7,760)
Depreciation of fixed assets(5,104)(7,534)
Right-of-use assets(38,666)(43,342)
(44,485)(58,924)
Net deferred tax liabilities$(1,520)$(1,088)
Deferred tax assets are evaluated by considering historical levels of income, estimates of future taxable income and the impact of tax planning strategies. The Company’s financial results for the year ended December 31, 2020, include a net increase in valuation allowance of $26.1 million. The Company has performed a continuing evaluation of its deferred tax asset valuation allowance on a quarterly basis. The Company concluded that, as of December 31, 2020, negative evidence outweighs positive evidence for the realization of deferred tax assets and as a result has provided a full valuation allowance against its net deferred tax assets.
As of December 31, 2020, the Company had $191.0 million of federal net operating loss carryforwards, which will begin to expire in 2033. These net operating losses have the potential to be used to offset future ordinary taxable income and reduce future cash tax liabilities. However, in connection with the acquisition of American Casino and Entertainment Properties LLC (“American”), the Company issued 4,046,494 shares of its common stock to a former American equity holder, which resulted in an “ownership change” under Section 382 that will generally limit the amount of net operating losses the Company can utilize annually. As of December 31, 2020, the Company has concluded that the acquisition of American will not result in a loss of net operating loss nor credit carryforwards.
Additionally, the Company had deferred tax assets of $4.5 million related to general business credits. The general business credit carryforward begins to expire in 2037.
As of December 31, 2020, the Company’s 2017 and 2018 federal tax returns were under audit by the IRS.
As of December 31, 2020, the Company had no material uncertain tax positions.