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Income Taxes | 12 Months Ended
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Sep. 30, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | 14) Income Taxes On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Reform Act”) was enacted into law. The Tax Reform Act is a complicated piece of legislation that, among other provisions, contains several key provisions which impact the Company, especially the reduction of the Federal corporate income tax rate from 35% to 21% effective January 1, 2018. In addition, between September 28, 2017 and December 31, 2022, the Tax Reform Act allows for the full depreciation, in the year acquired, for certain fixed assets purchased in that year (also known as 100% bonus depreciation). Given the significance and complexity of the legislation, the SEC staff issued Staff Accounting Bulletin No. 118, which allows registrants to record provisional amounts during a one year “measurement period” similar to that used when accounting for business combinations. During the measurement period, impacts of the law are expected to be recorded at the time a reasonable estimate for all or a portion of the effects can be made, and provisional amounts can be recognized and adjusted as information becomes available, prepared or analyzed. As of September, 30, 2018 the accounting for the income tax effects of the Tax Reform Act has been completed. The re-measurement of the deferred tax assets and liabilities resulted in an $11.1 million discrete tax benefit recorded as of September 30, 2018. Income tax expense is comprised of the following for the indicated periods (in thousands):
|  | Years Ended September 30, |
|  | 2018 |  |  | 2017 |  |  | 2016 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | (6,067 | ) |  | $ | 7,578 |  |  | $ | 18,724 |
State |  |  | (1,016 | ) |  |  | 2,664 |  |  |  | 5,344 |
Deferred |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 11,052 |  |  |  | 8,775 |  |  |  | 7,485 |
State |  |  | 3,633 |  |  |  | 1,359 |  |  |  | 2,185 |
|  | $ | 7,602 |  |  | $ | 20,376 |  |  | $ | 33,738 |
The provision for income taxes differs from income taxes computed at the Federal statutory rate as a result of the following (in thousands):
|  | Years Ended September 30, |
|  | 2018 |  |  | 2017 |  |  | 2016 |
Income from continuing operations before taxes |  | $ | 63,107 |  |  | $ | 47,276 |  |  | $ | 78,672 |
Provision for income taxes: |  |  |  |  |  |  |  |  |  |  |  |
Tax at Federal statutory rate |  | $ | 17,266 |  |  | $ | 16,546 |  |  | $ | 27,535 |
Effect of the tax reform on deferred taxes |  |  | (11,101 | ) |  |  | — |  |  |  | — |
Impact of Partnership loss not subject to federal income taxes |  |  | 53 |  |  |  | 741 |  |  |  | 477 |
State taxes net of federal benefit |  |  | 1,864 |  |  |  | 3,170 |  |  |  | 5,672 |
Permanent differences |  |  | 99 |  |  |  | 89 |  |  |  | 80 |
Change in valuation allowance net of effect of the tax reform |  |  | 107 |  |  |  | 115 |  |  |  | 26 |
Other |  |  | (686 | ) |  |  | (285 | ) |  |  | (52 | )
|  | $ | 7,602 |  |  | $ | 20,376 |  |  | $ | 33,738 |
The Tax at Federal statutory rate is determined based on income from continuing operations before tax and the enacted Federal statutory rate. For fiscal 2016, 2017, and first quarter of fiscal 2018 the Federal statutory rate was 35%. For the remainder of fiscal 2018 the Federal statutory rate was 21%. In fiscal 2018 income from continuing operations before tax was $28.7 million in the first quarter, and $34.4 million for the remainder of the fiscal year. The components of the net deferred taxes for the years ended September 30, 2018 and September 30, 2017 using current tax rates are as follows (in thousands):
|  | September 30, |
|  | 2018 |  |  | 2017 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 6,647 |  |  | $ | 5,374 |
Vacation accrual |  |  | 2,658 |  |  |  | 3,542 |
Pension accrual |  |  | 4,425 |  |  |  | 7,455 |
Allowance for bad debts |  |  | 2,226 |  |  |  | 2,166 |
Insurance accrual |  |  | 2,425 |  |  |  | 19,914 |
Inventory capitalization |  |  | 350 |  |  |  | 895 |
Other, net |  |  | 1,382 |  |  |  | 2,242 |
Total deferred tax assets |  |  | 20,113 |  |  |  | 41,588 |
Valuation allowance |  |  | (3,980 | ) |  |  | (3,168 | )
Net deferred tax assets |  | $ | 16,133 |  |  | $ | 38,420 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Property and equipment |  | $ | 9,783 |  |  | $ | 8,001 |
Fair value of derivative instruments |  |  | 4,673 |  |  |  | 1,683 |
Intangibles |  |  | 22,883 |  |  |  | 34,876 |
Total deferred tax liabilities |  | $ | 37,339 |  |  | $ | 44,560 |
Net deferred taxes |  | $ | (21,206 | ) |  | $ | (6,140 | )
In order to fully realize the net deferred tax assets, the Company’s corporate subsidiaries will need to generate future taxable income. A valuation allowance is recognized if, based on the weight of available evidence including historical tax losses, it is more likely than not that some or all of deferred tax assets will not be realized. The net change in the total valuation allowance for the fiscal year ended September 30, 2018 was an increase of $0.8 million, the majority of which relates to the effect of tax reform on deferred taxes. The net change in the total valuation allowance for the fiscal year ended September 30, 2017 was an increase of $0.1 million. Based upon a review of a number of factors and all available evidence, including recent historical operating performance, the expectation of sustainable earnings, and the confidence that sufficient positive taxable income will continue in all tax jurisdictions for the foreseeable future, management concludes for the year ended September 30, 2018, it is more likely than not that the Company will realize the full benefit of its deferred tax assets, net of existing valuation allowance at September 30, 2018. As of January 1, 2018, the Company had State tax effected net operating loss carry forwards (“NOLs”) of approximately $3.7 million after consideration of valuation allowances. The State NOLs, which will expire between 2023 and 2037, are generally available to offset any future taxable income in certain states FASB ASC 740-10-05-6 Income Taxes, Uncertain Tax Position, provides financial statement accounting guidance for uncertainty in income taxes and tax positions taken or expected to be taken in a tax return. At September 30, 2018, we did not have unrecognized income tax benefits. Our continuing practice is to recognize interest and penalties related to income tax matters as a component of income tax expense. We file U.S. Federal income tax returns and various state and local returns. A number of years may elapse before an uncertain tax position is audited and finally resolved. For our Federal income tax returns we have four tax years subject to examination. In our major state tax jurisdictions of New York, Connecticut, and Pennsylvania we have four years that are subject to examination. In the state tax jurisdiction of New Jersey we have five tax years that are subject to examination. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, based on our assessment of many factors including past experience and interpretation of tax law, we believe that our provision for income taxes reflect the most probable outcome. This assessment relies on estimates and assumptions and may involve a series of complex judgments about future events.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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