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Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2011
Income Taxes |
Income Taxes |
7. Income Taxes Our provision (benefit) for income taxes consists of the following:
|  | For the Year Ended December 31, |
--- | --- | --- | ---
|  | 2011 |  | 2010 |  | 2009 |
Current—Federal |  | $ | 180 |  | $ | — |  | $ | 600 |
State |  |  | 1,383 |  |  | 928 |  |  | 4,529 |
Foreign |  |  | 144 |  |  | (106 | ) |  | 140 |
|  |  | 1,707 |  |  | 822 |  |  | 5,269 |
Deferred—Federal |  |  | — |  |  | — |  |  | — |
State |  |  | — |  |  | — |  |  | — |
Foreign |  |  | (205 | ) |  | (184 | ) |  | (73 | )
|  |  | (205 | ) |  | (184 | ) |  | (73 | )
|  | $ | 1,502 |  | $ | 638 |  | $ | 5,196 |
A reconciliation of our effective tax rate and the U.S. Federal statutory income tax rate is as follows:
|  | For the Year Ended December 31, |
--- | --- | --- | ---
|  | 2011 |  | 2010 |  | 2009 |
Taxes at statutory U.S. federal income tax rate |  |  | 35.0 | % |  | 35.0 | % |  | 35.0 | %
Nontaxable income of HPT |  |  | (35.0 | )% |  | (35.0 | )% |  | (35.0 | )%
State and local income taxes, net of federal tax benefit |  |  | 4.3 | % |  | 0.2 | % |  | 5.4 | %
Alternative minimum tax |  |  | 0.1 | % |  | 0.0 | % |  | 0.3 | %
Foreign taxes |  |  | (0.3 | )% |  | (0.2 | )% |  | (0.2 | )%
Change in valuation allowance |  |  | (3.1 | )% |  | 6.1 | % |  | (1.4 | )%
Other differences, net |  |  | (0.3 | )% |  | (5.7 | )% |  | (1.4 | )%
Effective tax rate |  |  | 0.7 | % |  | 0.4 | % |  | 2.7 | %
Deferred income tax balances reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities on our consolidated balance sheets and the amounts used for income tax purposes and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. Significant components of our deferred tax assets and liabilities are as follows:
|  | For the Year Ended December 31, |
--- | --- | --- | ---
|  | 2011 |  | 2010 |
Deferred tax assets: |  |  |  |  |  |  |
Tax credits |  | $ | 12,014 |  | $ | 11,193 |
Tax loss carryforwards |  |  | 77,104 |  |  | 78,248 |
Other |  |  | 11,473 |  |  | 2,874 |
|  |  | 100,591 |  |  | 92,315 |
Valuation allowance |  |  | (100,180 | ) |  | (92,068 | )
|  |  | 411 |  |  | 247 |
Deferred tax liabilities: |  |  |  |  |  |  |
Puerto Rico basis difference |  |  | (9,185 | ) |  | (9,216 | )
|  |  | (9,185 | ) |  | (9,216 | )
Net deferred tax liabilities |  | $ | (8,774 | ) | $ | (8,969 | )
Deferred tax liabilities are included in accounts payable and other liabilities in our consolidated balance sheets. At December 31, 2011 and 2010, we had a deferred tax liability related to the hotel we purchased in Puerto Rico. Specifically, we acquired all of the outstanding stock of a C corporation that owned the hotel as its primary asset, which generally would cause us to succeed to the acquired corporation's tax bases. However, for U.S tax purposes we made an election under Section 338(g) of the Internal Revenue Code to avoid being treated as the successor to the acquired corporation's federal income tax attributes, including its adjusted tax bases. Because we opted not to make a similar election under Puerto Rico tax law, we recorded in purchase accounting a deferred tax liability for these basis differences at our effective Puerto Rico tax rate. On January 31, 2007, we succeeded to certain tax attributes in connection with our acquisition of TravelCenters of America, Inc., including net operating loss carryforwards and tax credit carryforwards. At December 31, 2011 and 2010, we had a net deferred tax asset, prior to any valuation allowance, of $66,062 and $67,973, respectively, related to these carryover tax attributes. Because of the uncertainty surrounding our ability to realize the future benefit of these assets we have provided a 100% valuation allowance as of December 31, 2011 and 2010. As of December 31, 2011, these carryover tax attributes consist of: (i) net operating loss carryforwards for federal income tax purposes of approximately $137,920 which begin to expire in 2026, if unused, (ii) alternative minimum tax credit carryforwards of $4,430 which do not expire, and (iii) general business tax credits of $6,600 which began to expire in 2009. The utilization of these tax loss carryforwards and tax credits is subject to limitations under Section 382 of the Internal Revenue Code. At December 31, 2011 and 2010, our consolidated TRS group had a net deferred tax asset, prior to any valuation allowance, of $30,806 and $23,430, respectively, which consists primarily of the tax benefit of net operating loss carryforwards and tax credits. Because of the uncertainty surrounding our ability to realize the future benefit of these assets, we have provided a 100% valuation allowance as of December 31, 2011 and 2010. As of December 31, 2011, our consolidated TRS group had net operating loss carryforwards for federal income tax purposes of approximately $55,976 which begin to expire in 2023, if unused.

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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 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 + Details
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