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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.