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Note 15 - Income Taxes
 12 Months Ended
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.