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Note 7 - Income Tax Expense | 12 Months Ended
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Dec. 31, 2020
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | NOTE 7 – Income Tax Expense: Aggregate income tax provisions consist of the following (in thousands):
|  | Years Ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 12,997 |  |  | $ | 3,049 |  |  | $ | 3,613 |
State and local |  |  | 1,956 |  |  |  | 1,074 |  |  |  | 643 |
Foreign |  |  | 486 |  |  |  | 502 |  |  |  | 789 |
|  |  | 15,439 |  |  |  | 4,625 |  |  |  | 5,045 |
Deferred Taxes: |  |  |  |  |  |  |  |  |  |  |  |
Deferred tax (benefit) provision |  |  | (5,009 | ) |  |  | (1,405 | ) |  |  | (625 | )
Income tax expense |  | $ | 10,430 |  |  | $ | 3,220 |  |  | $ | 4,420 |
The significant components of the deferred income tax (liability) asset are as follows (in thousands):
|  | December 31, |
|  | 2020 |  |  | 2019 |
Deferred income tax assets: |  |  |  |  |  |  |  |
Pension accruals |  | $ | 3,742 |  |  | $ | 2,588 |
Operating reserves and other accruals |  |  | 5,110 |  |  |  | 2,540 |
Tax credits |  |  | 513 |  |  |  | 923 |
Valuation allowance on tax credits |  |  | - |  |  |  | (923 | )
Deferred income tax liabilities: |  |  |  |  |  |  |  |
Book carrying value in excess of tax basis of property |  |  | (2,116 | ) |  |  | (1,544 | )
Book carrying value in excess of tax basis of intangibles |  |  | (5,780 | ) |  |  | (7,024 | )
Tax effect of revenue recognition standard ASC 606 |  |  | (1,021 | ) |  |  | (1,771 | )
Deferred expenses |  |  | (898 | ) |  |  | (1,831 | )
Net deferred income tax liability |  | $ | (450 | ) |  | $ | (7,042 | )
The difference between the total statutory Federal income tax rate and the actual effective income tax rate is accounted for as follows:
|  | Years Ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Statutory federal income tax rate |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 21.0 | %
State and local income taxes, net of federal income tax benefit |  |  | 1.3 | % |  |  | 4.8 | % |  |  | 2.0 | %
Rate impacts due to foreign operations |  |  | (4.5 | %) |  |  | (3.9 | %) |  |  | (2.7 | %)
Changes in uncertain tax positions |  |  | 0.2 | % |  |  | 1.7 | % |  |  | 0.4 | %
Compensation related |  |  | 2.3 | % |  |  | (0.2 | %) |  |  | 1.4 | %
R&D tax credits |  |  | (0.3 | %) |  |  | (0.9 | %) |  |  | (0.4 | %)
Other |  |  | 0.3 | % |  |  | (1.4 | %) |  |  | (1.0 | %)
Effective income tax rate |  |  | 20.3 | % |  |  | 21.1 | % |  |  | 20.7 | %
The Tax Cuts and Jobs Act enacted on December 22, 2017 imposed a U.S. tax on global intangible low taxed income (“GILTI”) that is earned by certain foreign affiliates owned by a U.S. shareholder. The computation of GILTI is generally intended to impose tax on the earnings of a foreign corporation that are deemed to exceed a certain threshold return relative to the underlying business investment. In accordance with guidance issued by FASB, the Company made a policy election to treat future taxes related to GILTI as a current period expense in the reporting period in which the tax is incurred. Deferred income taxes are provided on undistributed earnings of foreign subsidiaries in the period in which the Company determines it no longer intends to permanently reinvest such earnings outside the United States. The Company expects to permanently reinvest the earnings from its wholly-owned Brazilian and UK subsidiaries, and accordingly, has not provided deferred taxes on the subsidiaries’ undistributed net earnings or basis differences. The Company believes that the tax liability that would be incurred upon repatriation of the earnings from its Brazilian and UK subsidiaries is immaterial at December 31, 2020. Only tax positions that meet the more-likely-than-not recognition threshold are recognized in the financial statements. As of December 31, 2020 and 2019, we had $1.2 million and $0.9 million, respectively, of unrecognized tax benefits, all of which, if recognized, would favorably affect the annual effective income tax rate. We do not expect any significant amount of this liability to be paid in the next twelve months. Accordingly, the balance of $1.2 million as of December 31, 2020 is included in other long-term liabilities. Changes in the Company’s gross liability for unrecognized tax benefits, excluding interest and penalties, were as follows (in thousands):
|  | December 31, |
|  | 2020 |  |  | 2019 |
Balance at the beginning of year |  | $ | 681 |  |  | $ | 477 |
Additions based on tax positions related to the current year |  |  | 134 |  |  |  | 128 |
Additions for tax positions of prior years |  |  | 286 |  |  |  | 173 |
Reductions due to lapse of statute of limitations |  |  | (108 | ) |  |  | (97 | )
Balance at the end of year |  | $ | 993 |  |  | $ | 681 |
We recognize interest and penalties accrued related to unrecognized tax benefits in the provision for income taxes. During the years ended December 31, 2020, 2019 and 2018, we recorded $0.2 million, $0.2 million and $0.1 million, respectively, for interest and penalties, net of tax benefits. During each of the years 2020, 2019 and 2018, we reduced the liability by $0.1 million for interest and penalties due to lapse of statute of limitations. At December 31, 2020 and 2019, we had $0.2 million accrued for interest and penalties, net of tax benefit. We anticipate that it is reasonably possible that the total amount of unrecognized tax benefits could decrease by approximately $0.3 million within the next twelve months due to the closure of tax years by expiration of the statute of limitations and audit settlements related to various state tax filing positions. The earliest year open to federal examinations is 2017 and significant state examinations is 2014.

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- Definition 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. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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