13.	FEDERAL AND STATE INCOME TAXES

Under GAAP, deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and for income tax reporting purposes.

Significant components of the Company’s deferred tax liabilities and assets at

December 31

are as follows:

	201 8		201 7
	(in thousands)

Deferred tax liabilities:
Property and equipment	$	78,502	$	60,388
Unrealized gains on securities		2,580		2,580
Prepaid expenses and other		2,667		2,603

Total deferred tax liabilities		83,749		65,571

Deferred tax assets:
Allowance for doubtful accounts		572		344
QAFMV tax credit carryforward		864		864
New hire tax credit		124		124
Compensated absences		460		410
Self-insurance allowances		188		149
Share-based compensation		-		61
Marketable equity securities		2,200		750
Net operating loss carryover		17,241		7,975
Other		203		203

Total deferred tax assets		21,852		10,880

Net deferred tax liability	$	61,897	$	54,691

The reconciliation between the effective income tax rate and the statutory Federal income tax rate for the years ended

December

31,

2018,

2017

and

2016

is presented in the following table:

	201 8				201 7						201 6
	(in thousands)
	Amount		Percent		Amount			Percent			Amount		Percent

Income tax at the statutory federal rate	$	6,582		21.0	$	4,975			34.0		$	6,042		34.0
Impact of the Tax Cuts and Jobs Act (1)		-		-		(29,255	)		(199.9	)		-		-
Nondeductible expenses		80		0.2		72			0.5			130		0.7
State income taxes/other—net of federal benefit		685		2.2		(60	)		(0.5	)		499		2.8

Total income tax (benefit) expense	$	7,347		23.4	$	(24,268	)		(165.9	)	$	6,671		37.5

(

) On

December 22, 2017,

the Tax Cuts and Jobs Act (the “Act”) was signed into law. The Act included numerous changes to existing tax law, including a permanent reduction in the federal corporate income tax rate from

35%

21%

effective

January 1, 2018

and repeal of the alternative minimum tax (“AMT”) allowing a refund of existing AMT carryovers during the years

2018

through

2021.

As a result, the Company recorded a tax benefit of

$29.3

million in the

fourth

quarter of

2017

related to the revaluation of its net deferred tax liabilities.

The (benefit) provision for income taxes consisted of the following:

	201 8			201 7			201 6
	(in thousands)
Current:
Federal	$	(48	)	$	(79	)	$	(225	)
State		189			441			238
Total current income tax provision		141			362			13
Deferred:
Federal		6,185			(24,622	)		5,506
State		1,021			(8	)		1,152
Total deferred income tax (benefit) provision		7,206			(24,630	)		6,658

Total income tax (benefit) expense	$	7,347		$	(24,268	)	$	6,671

December 31, 2018,

the Company has alternative minimum tax credits of approximately

$1,214,000

which will either be refunded at the rate of

50%

of the remaining credit each succeeding year, or used to offset regular Federal income tax in those succeeding years. The Company has general business credits of approximately

$988,000

December 31, 2018,

which begin to expire after the year

2030.

The Company also has net operating loss carryovers for federal income purposes of approximately

$66,983,000

which begin to expire after the year

2030.

In determining whether a tax asset valuation allowance is necessary, management, in accordance with the provisions of ASC

740

30,

weighs all available evidence, both positive and negative to determine whether, based on the weight of that evidence, a valuation allowance is necessary. If negative conditions exist which indicate a valuation allowance might be necessary, consideration is then given to what effect the future reversals of existing taxable temporary differences and the availability of tax strategies might have on future taxable income to determine the amount, if any, of the required valuation allowance. As of

December 31, 2018

and

2017,

management determined that the future reversals of existing taxable temporary differences and available tax strategies would generate sufficient future taxable income to realize its tax assets and therefore a valuation allowance was

not

necessary.

The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than

not

that the position will be sustained on examination by taxing authorities, based on the technical merits of the position. As of

December 31, 2018,

an adjustment to the Company’s consolidated financial statements for uncertain tax positions has

not

been required as management believes that the Company’s tax positions taken in income tax returns filed or to be filed are supported by clear and unambiguous income tax laws. The Company recognizes interest and penalties related to uncertain income tax positions, if any, in income tax expense. During

2018

and

2017,

the Company has

not

recognized or accrued any interest or penalties related to uncertain income tax positions.

The Company and its subsidiaries are subject to U.S. and Canadian federal income tax laws as well as the income tax laws of multiple state jurisdictions. The major tax jurisdictions in which the Company operates generally provide for a deficiency assessment statute of limitation period of

three

years, and as a result, the Company’s tax years

2015

and forward remain open to examination in those jurisdictions.

Prior to

2018,

the Company contracted with a

third

-party qualified intermediary in order to maintain a like-kind exchange tax program. Under the program, dispositions of eligible trucks or trailers and acquisitions of replacement trucks or trailers were made in a form whereby any associated tax gains related to the disposal were deferred. To qualify for like-kind exchange treatment, we exchanged, through our qualified intermediary, eligible trucks or trailers being disposed with trucks or trailers being acquired, which allowed us to generally carryover the tax basis of the trucks or trailers sold. The program was expected to result in a significant deferral of federal and state income taxes. Under the program, the proceeds from the sale of eligible trucks or trailers carried a Company-imposed restriction for the acquisition of replacement trucks or trailers. These proceeds could have been disqualified under the program at any time and at the Company’s sole discretion; however, income tax deferral would

not

have been available for any sale for which the Company disqualified the related proceeds. At

December

31,

2017,

the Company had

$29,000

of restricted cash held by the

third

-party qualified intermediary. Restricted cash is accounted for in “Accounts receivable-other.”