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Note 14 - Income Taxes | 12 Months Ended
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Dec. 31, 2019
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | 14. Income Taxes: The components of the Company’s provision (benefit) for income taxes from continuing operations were as follows:
|  | As of December 31, |
(in thousands) |  | 2019 |  |  | 2018 |  |  | 2017 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 1,747 |  |  | $ | 9,188 |  |  | $ | 7,695 |
International |  |  | 107 |  |  |  | - |  |  |  | - |
State and local |  |  | 22 |  |  |  | 1,797 |  |  |  | 666 |
|  |  | 1,876 |  |  |  | 10,985 |  |  |  | 8,361 |
Deferred |  |  | (443 | ) |  |  | 1,320 |  |  |  | (10,974 | )
Income tax provision (benefit) |  | $ | 1,433 |  |  | $ | 12,305 |  |  | $ | (2,613 | )
The components of the Company’s deferred income taxes at December 31 are as follows:
(in thousands) |  | 2019 |  |  | 2018 |
Deferred tax assets: |  |  |  |  |  |  |  |
Inventory (excluding LIFO reserve) |  | $ | 1,353 |  |  | $ | 1,622 |
Net operating loss and tax credit carryforwards |  |  | 3,198 |  |  |  | 2,498 |
Allowance for doubtful accounts |  |  | 513 |  |  |  | 504 |
Accrued expenses |  |  | 5,486 |  |  |  | 6,087 |
Lease liabilities |  |  | 6,718 |  |  |  | - |
Interest rate hedge |  |  | 760 |  |  |  | - |
Other |  |  | 237 |  |  |  | 232 |
Deferred tax assets before valuation allowance |  |  | 18,265 |  |  |  | 10,943 |
Valuation allowance |  |  | (2,215 | ) |  |  | (2,055 | )
Total deferred tax assets |  |  | 16,050 |  |  |  | 8,888 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
LIFO reserve |  |  | (3,646 | ) |  |  | (3,870 | )
Property and equipment |  |  | (13,250 | ) |  |  | (13,625 | )
Lease right of use assets |  |  | (6,718 | ) |  |  | - |
Intangibles |  |  | (4,698 | ) |  |  | (4,858 | )
Total deferred tax liabilities |  |  | (28,312 | ) |  |  | (22,353 | )
Deferred tax liabilities, net |  | $ | (12,262 | ) |  | $ | (13,465 | )
The deferred tax liability decreased by $760 thousand related to the fixed interest rate hedge, which is recorded in “Other Comprehensive Income” in the Consolidated Statements of Comprehensive Income. The following table summarizes the activity related to the Company’s gross unrecognized tax benefits:
(in thousands) |  | 2019 |  |  | 2018 |  |  | 2017 |
Balance as of January 1 |  | $ | 27 |  |  | $ | 40 |  |  | $ | 38 |
Change in tax due to tax law |  |  | - |  |  |  | (12 | ) |  |  | - |
Increases related to current year tax positions |  |  | 10 |  |  |  | 9 |  |  |  | 15 |
Decreases related to lapsing of statute of limitations |  |  | (9 | ) |  |  | (10 | ) |  |  | (13 | )
Balance as of December 31 |  | $ | 28 |  |  | $ | 27 |  |  | $ | 40 |
It is expected that the amount of unrecognized tax benefits will not materially change in the next twelve months. The tax years 2016 through 2018 remain open to examination by major taxing jurisdictions to which the Company is subject. The Company recognized interest related to uncertain tax positions in the income tax provision. The following table reconciles the U.S. federal statutory rate to the Company’s effective tax rate:
|  | 2019 |  |  | 2018 |  |  | 2017 |
U.S. federal statutory rate in effect |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 35.0 | %
State and local taxes, net of federal benefit |  |  | 3.7 | % |  |  | 4.6 | % |  |  | 3.6 | %
Sec. 199 manufacturing deduction |  |  | - |  |  |  | - |  |  |  | (3.8 | %)
Meals and entertainment |  |  | 5.8 | % |  |  | 0.6 | % |  |  | 1.8 | %
Tax credits |  |  | (4.2 | %) |  |  | (0.6 | %) |  |  | (1.3 | %)
Change in valuation allowance |  |  | - |  |  |  | - |  |  |  | 0.6 | %
Change in U.S. federal statutory rate |  |  | - |  |  |  | - |  |  |  | (37.7 | %)
Change in tax affect of SERP |  |  | - |  |  |  | - |  |  |  | (11.4 | %)
All other, net |  |  | 0.8 | % |  |  | 1.1 | % |  |  | (2.8 | %)
Effective income tax rate |  |  | 27.1 | % |  |  | 26.7 | % |  |  | (16.0 | %)
On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act, among other things, lowered the U.S. corporate income tax rate from 35% to 21% effective January 1, 2018. Consequently, the Company decreased its net deferred tax liability as of December 31, 2017 by $6.2 million resulting in an income tax benefit to reflect the estimated impact of the Tax Act. Based on the Company’s predominantly U.S. based operational footprint, additional international and minimum tax provisions under the Tax Act, including the one -time transition tax for the transition from the worldwide system to the territorial system, were not applicable, or were not material to the Company. In 2017, the Company made an out-of-period adjustment to correct and record previously unrecognized deferred tax assets, and the associated tax benefit, related to a portion of the SERP that had previously been considered non-deductible under Section 162 (m) limitations in prior years. Due to the mandatory waiting period of six months prior to any SERP payment distribution, in 2017 the Company determined that the Section 162 (m) non-deductibility limitations did not apply. The adjustment, which had accumulated since the inception of the SERP in 2005, resulted in an increase to after-tax income of $1.9 million in 2017. The Company determined that this adjustment was not material to its current or prior period consolidated financial statements. Income taxes paid in 2019, 2018 and 2017 totaled $0.5 million, $11.3 million and $9.4 million, respectively. Some subsidiaries of the Company’s consolidated group file state tax returns on a separate company basis and have state net operating loss carryforwards expiring over the next two to 20 years. A valuation allowance is recorded to reduce certain deferred tax assets to the amount that is more likely than not to be realized.

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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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