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INCOME TAXES

12 Months Ended

Dec. 31, 2022

INCOME TAXES

INCOME TAXES

NOTE 8: INCOME TAXES

The following table lists the components of the provision for income taxes:

​

​	​	​	​	​	​	​	​	​	​
(in thousands)		2022			2021			2020
Current provision:		​			​			​
Federal	​	$	12,225	​	$	7,176	​	$	4,741
State	​		1,360	​		346	​		582
Deferred (benefit) provision:	​		​	​		​	​
Federal	​		(1,687)	​		(248)	​		(410)
State	​		(111)	​		108	​		99
Total income tax provision	​	$	11,787	​	$	7,382	​	$	5,012

​

A reconciliation between the federal statutory rate and Marine Products’ effective tax rate is as follows:

​

​	​	​	​	​	​	​	​
​		2022		2021		2020
Federal statutory rate		21.0	%	21.0	%	21.0	%
State income taxes, net of federal benefit		1.3		0.9		1.4
Research and experimentation credit		(0.7)		(0.9)		(1.5)
Non-deductible expenses	​	0.3	​	(0.8)	​	0.1	​
Change in contingencies		0.8		0.4		0.1
Adjustments related to vesting of restricted stock		(0.1)		(1.0)		(1.5)
Other		—		0.7		0.9
Effective tax rate		22.6	%	20.3	%	20.5	%

​

Significant components of the Company’s deferred tax assets and liabilities are as follows:

​

​	​	​	​	​	​	​
December 31,		2022			2021
(in thousands)		​			​
Deferred tax assets:		​			​
Warranty costs	​	$	1,254	​	$	1,021
Stock-based compensation	​		866	​		780
Pension	​		3,099	​		3,196
State NOL’s	​	​	221	​	​	283
Capitalized research and development	​	​	1,300	​	​	—
All others, net	​		789	​		589
Total deferred tax assets	​		7,529	​		5,869
Deferred tax liabilities:	​			​
Depreciation and amortization expense	​		(1,092)	​		(1,033)
Basis differences in joint venture	​		(410)	​		(444)
Net deferred tax assets	​	$	6,027	​	$	4,392

​

Total net income tax payments were $13,022,000 in 2022, $7,493,000 in 2021, and $4,099,000 in 2020. As of December 31, 2022, the Company had net operating loss carryforwards related to state income taxes of approximately $4.6 million (gross) that will expire between 2030 and 2034. The Company does not have a valuation allowance related to net operating loss carryforwards due to implemented tax planning strategies.

The Company’s policy is to record interest and penalties related to income tax matters as income tax expense. Accrued interest and penalties were immaterial as of December 31, 2022 and 2021.

During 2022, the Company recognized an increase in its liability for unrecognized tax benefits related primarily to prior year positions and disclosed as part of other long-term liabilities on the consolidated balance sheet. This liability, if released, would affect our effective rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

​

​	​	​	​	​	​	​
(in thousands)		2022			2021
Balance at beginning of the year	​	$	539	​	$	401
Additions based on tax positions related to the current year	​		393	​		32
Additions for tax positions of prior years	​		126	​		106
Balance at end of the year	​	$	1,058	​	$	539

​

It is reasonably possible that the amount of the unrecognized benefits with respect to the Company’s unrecognized tax positions will increase or decrease in the next 12 months. These changes may be the result of, among other things, state tax settlements under voluntary disclosure agreements, or conclusions of ongoing examinations or reviews. However, quantification of an estimated range cannot be made at this time.

The Company and its subsidiaries are subject to U.S. federal and state income tax in multiple jurisdictions. In many cases, the uncertain tax positions are related to tax years that remain open and subject to examination by the relevant taxing authorities. In general, the Company’s 2019 through 2021 tax years remain open to examination. Additional years may be open to the extent attributes are being carried forward to an open year.

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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.

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