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Note 15 - Income Taxes | 12 Months Ended
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Dec. 31, 2021
Notes to Financial Statements |
Income Tax Disclosure [Text Block] |
15. | 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) |  | 2021 |  |  | 2020 |  |  | 2019 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 36,592 |  |  | $ | 321 |  |  | $ | 1,747 |
International |  |  | 85 |  |  |  | 103 |  |  |  | 107 |
State and local |  |  | 7,739 |  |  |  | 59 |  |  |  | 22 |
|  |  | 44,416 |  |  |  | 483 |  |  |  | 1,876 |
Deferred |  |  | (668 | ) |  |  | (1,799 | ) |  |  | (443 | )
Income tax provision (benefit) |  | $ | 43,748 |  |  | $ | (1,316 | ) |  | $ | 1,433 |
The components of the Company’s deferred income taxes at December 31 are as follows:
(in thousands) |  | 2021 |  |  | 2020 |
Deferred tax assets: |  |  |  |  |  |  |  |
Inventory (excluding LIFO reserve) |  | $ | 2,198 |  |  | $ | 1,529 |
Net operating loss and tax credit carryforwards |  |  | 1,375 |  |  |  | 3,510 |
Allowance for credit losses |  |  | 626 |  |  |  | 440 |
Accrued expenses |  |  | 5,288 |  |  |  | 5,778 |
Lease liabilities |  |  | 8,568 |  |  |  | 7,348 |
Interest rate hedge |  |  | 665 |  |  |  | 1,405 |
Other |  |  | 205 |  |  |  | 390 |
Deferred tax assets before valuation allowance |  |  | 18,925 |  |  |  | 20,400 |
Valuation allowance |  |  | (1,197 | ) |  |  | (2,302 | )
Total deferred tax assets |  |  | 17,728 |  |  |  | 18,098 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
LIFO reserve |  |  | (3,500 | ) |  |  | (3,528 | )
Property and equipment |  |  | (12,293 | ) |  |  | (13,562 | )
Lease right of use assets |  |  | (8,483 | ) |  |  | (7,294 | )
Intangibles |  |  | (3,342 | ) |  |  | (3,532 | )
Total deferred tax liabilities |  |  | (27,618 | ) |  |  | (27,916 | )
Deferred tax liabilities, net |  | $ | (9,890 | ) |  | $ | (9,818 | )
The net deferred tax liability increased by $740 thousand related to the fixed interest rate hedge, which is recorded in “Other Comprehensive Income (Loss)” in the Consolidated Statements of Comprehensive Income (Loss). The following table summarizes the activity related to the Company’s gross unrecognized tax benefits:
(in thousands) |  | 2021 |  |  | 2020 |  |  | 2019 |
Balance as of January 1 |  | $ | 28 |  |  | $ | 28 |  |  | $ | 27 |
Change in tax due to tax law |  |  | - |  |  |  | - |  |  |  | - |
Increases related to current year tax positions |  |  | 8 |  |  |  | 8 |  |  |  | 10 |
Increases related to prior year tax positions |  |  | 200 |  |  |  | - |  |  |  | - |
Decreases related to lapsing of statute of limitations |  |  | (8 | ) |  |  | (8 | ) |  |  | (9 | )
Balance as of December 31 |  | $ | 228 |  |  | $ | 28 |  |  | $ | 28 |
It is expected that the amount of unrecognized tax benefits will not materially change in the next twelve months. The tax years 2018 through 2020 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:
|  | 2021 |  |  | 2020 |  |  | 2019 |
U.S. federal statutory rate in effect |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 21.0 | %
State and local taxes, net of federal benefit |  |  | 4.5 | % |  |  | 1.0 | % |  |  | 3.7 | %
Meals and entertainment |  |  | 0.1 | % |  |  | (1.8 | %) |  |  | 5.8 | %
Tax credits |  |  | (0.1 | %) |  |  | 2.0 | % |  |  | (4.2 | %)
Stock based compensation |  |  | - |  |  |  | (3.4 | %) |  |  | - |
All other, net |  |  | 1.0 | % |  |  | 0.2 | % |  |  | 0.8 | %
Effective income tax rate |  |  | 26.5 | % |  |  | 19.0 | % |  |  | 27.1 | %
Income taxes paid in 2021, 2020 and 2019 totaled $46.5 million, $1 thousand and $0.5 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 ten 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. The valuation allowances recorded as of December 31, 2021 and 2020 were related to certain state net operating losses and totaled $1.2 million and $2.3 million, respectively.

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