12.	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 9		201 8
	(in thousands)

Deferred tax liabilities:
Property and equipment	$	83,453	$	78,502
Unrealized gains on securities		2,580		2,580
Prepaid expenses and other		2,193		2,667

Total deferred tax liabilities		88,226		83,749

Deferred tax assets:
Allowance for doubtful accounts		760		572
QAFMV tax credit carryforward		864		864
New hire tax credit		124		124
Compensated absences		512		460
Self-insurance allowances		5,630		188
Marketable equity securities		1,253		2,200
Net operating loss carryover		15,364		17,241
Other		198		203

Total deferred tax assets		24,705		21,852

Net deferred tax liability	$	63,521	$	61,897

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

December

31,

2019,

2018

and

2017

is presented in the following table:

	201 9						201 8				201 7
	(in thousands)
	Amount			Percent			Amount		Percent		Amount			Percent

Income tax at the statutory federal rate	$	2,124			21.0		$	6,582		21.0	$	4,975			34.0
Impact of the Tax Cuts and Jobs Act (1)		-			-			-		-		(29,255	)		(199.9	)
Nondeductible expenses		342			3.4			80		0.2		72			0.5
State income taxes/other—net of federal benefit		(251	)		(2.5	)		685		2.2		(60	)		(0.5	)

Total income tax expense (benefit)	$	2,215			21.9		$	7,347		23.4	$	(24,268	)		(165.9	)

(

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

	201 9			201 8			201 7
	(in thousands)
Current:
Federal	$	(56	)	$	(48	)	$	(79	)
State		646			189			441
Total current income tax provision		590			141			362
Deferred:
Federal		2,177			6,185			(24,622	)
State		(552	)		1,021			(8	)
Total deferred income tax provision (benefit)		1,625			7,206			(24,630	)

Total income tax provision (benefit) expense	$	2,215		$	7,347		$	(24,268	)

December 31, 2019,

the Company has alternative minimum tax credits of approximately

$607,000

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

$66,805,000

of which

$30,835,000

will begin to expire after the year

2030

while the remaining balance does

not

expire and can be carried forward indefinitely.

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, 2019

and

2018,

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, 2019,

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

2019

and

2018,

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

2016

and forward remain open to examination in those jurisdictions.