Note 11: Income Taxes

Provision (benefit) for income taxes are as follows:


	Three Months Ended March 31,
	2014		2013
	(In Thousands)
Current:
Federal	$	980	$	(970	)
State		675		(115	)

Total Current		1,655		(1,085	)

Deferred:
Federal		5,393		309
State		606		31

Total Deferred		5,999		340

Provision (benefit) for income taxes	$	7,654	$	(745	)

For the three months ended March 31, 2014 and 2013, the current provision (benefit) for federal income taxes shown above includes regular federal income tax after the consideration of permanent and temporary differences between income (loss) for GAAP and tax purposes, including the benefit related to the retroactive tax relief for certain tax provisions that expired in 2012 as discussed below. For the three months ended March 31, 2014 and 2013, the current provision (benefit) for state income taxes shown above includes regular state income tax and provisions for uncertain state income tax positions.

Our annual estimated effective tax rate for 2013 includes the impact of permanent tax differences, such as the domestic manufacturer’s deduction, the advanced energy credit and other permanent items. In connection with the American Taxpayer Relief Act of 2012 that was signed into law in January 2013, we recorded a one-time benefit of approximately $0.5 million related to the retroactive tax relief for certain tax provisions that expired in 2012. Because the legislation was signed into law after December 31, 2012, the retroactive effects of the law was reflected in the first quarter of 2013 and impacted the estimated effective tax rate for 2013.

The tax provision for the three months ended March 31, 2014 was $7.7 million (40% of pre-tax income,) and a tax benefit of $0.7 million (38% of pre-tax loss, excluding the impact of the 2012 retroactive tax benefits) for the three months ended March 31, 2013.

LSB and certain of its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. With few exceptions, the 2010-2012 years remain open for all purposes of examination by the U.S. Internal Revenue Service (“IRS”) and other major tax jurisdictions. We are under examination by the IRS for the tax years 2008-2010. As of March 31, 2014, the IRS has proposed certain adjustments, which we are protesting. We anticipate that the adjustments, if any, will not result in a material change to our financial position, results of operations and cash flows.