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Income Taxes | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | (3) Income Taxes On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Reform Act”) was signed into law. The legislation significantly changes U.S. tax law by, among other things, lowering corporate income tax rate, implementing a territorial tax system and imposing a repatriation tax on deemed repatriated earnings of foreign subsidiaries. The Tax Reform Act reduces the U.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. The SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act. A company may select between one of three scenarios to determine a reasonable estimate arising from the Tax Reform Act. Those scenarios are (i) a final estimate which effectively closes the measurement window; (ii) a reasonable estimate leaving the measurement window open for future revisions; and (iii) no estimate as the law is still being analyzed. The Company made a reasonable estimate for the revaluation of deferred taxes and the effects of the repatriation undistributed foreign subsidiary earnings and profits. As a result of the reduction in the U.S. corporate income tax rate from 35% to 21% under the Tax Reform Act, the Company revalued its net deferred tax liabilities at December 31, 2017, resulting in a $4,683 benefit included in the provision for income taxes for the year ended December 31, 2017. The Tax Reform Act also provided for a one-time deemed mandatory repatriation of Post-1986 E&P through the year ended December 31, 2017. As a result, the Company recognized a provisional $1,250 charge in the provision for income taxes for the year ended December 31, 2017 related to the deemed mandatory repatriation. During 2018, additional work including a more detailed analysis of the Company’s deferred tax assets and liabilities and its historical foreign earnings as well as potential correlative adjustments were completed. In this regard, the Company recorded a one-time $1,089 charge in the provision for income taxes for the year ended December 31, 2018. The provisions for income taxes are:
|  | 2018 |  |  | 2017 |  |  | 2016 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 5,641 |  |  | $ | 2,124 |  |  | $ | 5,136 |
State |  |  | 1,777 |  |  |  | 1,347 |  |  |  | (122 | )
Foreign |  |  | 2,121 |  |  |  | 570 |  |  |  | 655 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 650 |  |  |  | 160 |  |  |  | (1,345 | )
State |  |  | (365 | ) |  |  | 242 |  |  |  | 1,216 |
Foreign |  |  | (679 | ) |  |  | — |  |  |  | — |
|  | $ | 9,145 |  |  | $ | 4,443 |  |  | $ | 5,540 |
Total income tax expense differed from the amounts computed by applying the U.S. Federal income tax rate of 21.0% to income before income tax expense as a result of the following:
|  | 2018 |  |  | 2017 |  |  | 2016 |
Computed tax expense at statutory federal rates |  | $ | 7,054 |  |  | $ | 8,651 |  |  | $ | 6,415 |
Increase (decrease) in taxes resulting from: |  |  |  |  |  |  |  |  |  |  |  |
State taxes, net of federal income tax benefit |  |  | 1,627 |  |  |  | 988 |  |  |  | 820 |
Domestic production deduction |  |  | — |  |  |  | (150 | ) |  |  | (1,272 | )
Impact of the enactment of the Tax Cuts and Jobs Act (net) |  |  | 1,089 |  |  |  | (3,433 | ) |  |  | — |
Income tax credits |  |  | (689 | ) |  |  | (431 | ) |  |  | (335 | )
Foreign tax rate differential |  |  | (37 | ) |  |  | (1,503 | ) |  |  | (1,587 | )
Subpart F income |  |  | 14 |  |  |  | 3 |  |  |  | 14 |
(Gain) loss on equity investments |  |  | (61 | ) |  |  | 62 |  |  |  | 123 |
Stock based compensation |  |  | 277 |  |  |  | 262 |  |  |  | 208 |
Tax interest |  |  | — |  |  |  | (22 | ) |  |  | 920 |
Other |  |  | (129 | ) |  |  | 16 |  |  |  | 234 |
|  | $ | 9,145 |  |  | $ | 4,443 |  |  | $ | 5,540 |
Income before provision for income taxes and losses on equity investments are:
|  | 2018 |  |  | 2017 |  |  | 2016 |
Domestic |  | $ | 26,124 |  |  | $ | 18,931 |  |  | $ | 12,513 |
Foreign |  |  | 7,472 |  |  |  | 5,922 |  |  |  | 6,404 |
|  | $ | 33,596 |  |  | $ | 24,853 |  |  | $ | 18,917 |
Temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities that give rise to significant portions of the net deferred tax liability at December 31, 2018 and 2017 relate to the following:
|  | 2018 |  |  | 2017 |
Deferred tax asset |  |  |  |  |  |  |  |
Inventories |  | $ | 3,299 |  |  | $ | 3,213 |
State income taxes |  |  | 53 |  |  |  | 330 |
Program accrual |  |  | 7,088 |  |  |  | 7,381 |
Vacation pay accrual |  |  | 685 |  |  |  | 600 |
Accrued bonuses |  |  | 1,246 |  |  |  | 1,073 |
Bad debt expense |  |  | 294 |  |  |  | 12 |
Stock compensation |  |  | 1,723 |  |  |  | 822 |
NOL carryforward |  |  | 580 |  |  |  | 54 |
Tax credits |  |  | 779 |  |  |  | 778 |
Other |  |  | 266 |  |  |  | 381 |
Deferred tax asset |  | $ | 16,013 |  |  | $ | 14,644 |
Deferred tax liability |  |  |  |  |  |  |  |
Plant and equipment, principally due to differences in depreciation and capitalized interest |  | $ | 30,269 |  |  | $ | 29,986 |
Prepaid expenses |  |  | 1,107 |  |  |  | 942 |
Deferred tax liability |  |  | 31,376 |  |  |  | 30,928 |
Total net deferred tax liability |  | $ | 15,363 |  |  | $ | 16,284 |
The following is a roll-forward of the Company’s total gross unrecognized tax liabilities, not including interest and penalties, for the years ended December 31, 2018 and 2017:
|  | 2018 |  |  | 2017 |
Balance at beginning of year |  | $ | 2,118 |  |  | $ | 1,893 |
Additions for tax positions related to the current year |  |  | 128 |  |  |  | 77 |
Additions for tax positions related to the prior years |  |  | 24 |  |  |  | — |
Additions for tax positions related to acquired businesses |  |  | — |  |  |  | 1,766 |
Reduction for tax positions related to the prior years |  |  | (100 | ) |  |  | (1,618 | )
Balance at end of year |  | $ | 2,170 |  |  | $ | 2,118 |
The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes in the Company’s consolidated financial statements. For the years ended December 31, 2018, 2017, and 2016 the Company had recognized approximately $2,368, $2,257, and $408 respectively in interest and penalties related to unrecognized tax benefits. It is expected that the amount of unrecognized tax benefits will change within the next twelve months; however we do not expect the change to have a significant impact on our consolidated financial statements. At this time, an estimate of the range of the reasonable possible outcomes cannot be made. The Company believes it is more likely than not that the deferred tax assets detailed in the table above will be realized in the normal course of business. It is the intent of the Company that undistributed earnings of foreign subsidiaries are permanently reinvested. The amount of undistributed earnings was $4,297 as of December 31, 2018. Upon distribution of earnings in the form of dividends or otherwise, the Company may still be subject to state income taxes and withholding taxes payable to the various foreign countries. Determination of the unrecognized deferred tax liability is not practical due to the complexities of a hypothetical calculation. The Company is subject to U.S. federal income tax as well as to income tax in multiple state jurisdictions. Federal income tax returns of the Company are subject to International Revenue (“IRS”) examination for the 2015 through 2017 tax years. State income tax returns are subject to examination for the 2014 through 2017 tax years. The Company has other foreign income tax returns subject to examination.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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