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Income Taxes | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income Taxes |
6. | Income Taxes
On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, the following that impact us: (1) reducing the U.S. federal corporate income tax rate from 35 percent to 21 percent; (2) eliminating the corporate alternative minimum tax (“AMT”) and changing how existing AMT credits can be realized; (3) creating a new limitation on deductible interest expense; (4) repealing the domestic production activities deduction; (5) limiting the deductibility of certain executive compensation; and (6) limiting certain other deductions. The SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting relating to the Tax Act under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in its financial statements. If a company cannot determine a provisional estimate to be included in its financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. In connection with our initial analysis of the impact of the Tax Act, we have recorded a provisional amount of net tax benefit of $11.5 million in the year ended December 31, 2017 related to the remeasurement of our deferred tax balance and other effects. For various reasons including those discussed below, we have not fully completed our accounting for the income tax effects of the Tax Act. As we were able to make reasonable estimates of the effects of the Tax Act, we recorded provisional amounts. In connection with the adoption of the Tax Act, we:
– | Remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally at a federal rate of 21%. However, we are still analyzing certain aspects of the Tax Act and refining our calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. Our financial statements include provisional amounts for the impacts of deferred tax revaluation.
| – | Evaluated the future deductibility of executive compensation due to the elimination of the performance-based exception as well as the modification of who is treated as a covered person in connection with limiting the deduction. As part of the Tax Act, there is a transition rule for written, binding contracts in place prior to November 2, 2017 related to executive compensation, that have not been modified in any material respect. Further guidance is needed to fully determine the impact of these provisions. Our financial statements include provisional amounts for the impacts of the changes to the deductibility of executive compensation.
| – | Performed initial evaluations of the state conformity to the Tax Act. We continue to assess the conformity of each state in which we operate to the Tax Act. Our financial statements include provisional amounts for the impacts of state conformity.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax liabilities and assets are as follows:
|  | December 31, |
|  | 2017 |  | 2016 |
|  | (In thousands) |
Deferred tax liabilities: |  |  |  |  |  |  |
Property and equipment |  | $ | 4,333 |  | $ | 6,858 |
Intangible assets |  |  | 17,640 |  |  | 24,987 |
Prepaid expenses |  |  | 317 |  |  | 619 |
Total deferred tax liabilities |  |  | 22,290 |  |  | 32,464 |
Deferred tax assets: |  |  |  |  |  |  |
Allowance for doubtful accounts |  |  | 116 |  |  | 224 |
Compensation |  |  | 1,058 |  |  | 2,421 |
Other accrued liabilities |  |  | 44 |  |  | 78 |
|  |  | 1,218 |  |  | 2,723 |
Less: valuation allowance |  |  | — |  |  | — |
Total net deferred tax assets |  |  | 1,218 |  |  | 2,723 |
Net deferred tax liabilities |  | $ | 21,072 |  | $ | 29,741 |
Current portion of deferred tax assets |  | $ | 300 |  | $ | 1,022 |
Non-current portion of deferred tax liabilities |  |  | (21,372) |  |  | (30,763) |
Net deferred tax liabilities |  | $ | (21,072) |  | $ | (29,741) |
Deferred tax assets are required to be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. At December 31, 2017 and December 31, 2016, we do not have a valuation allowance for net deferred tax assets. At December 31, 2017 and 2016, net deferred tax liabilities include a deferred tax asset of $1,175,000 and $2,723,000, respectively, relating to deferred compensation, stock-based compensation expense, accrued compensation, the allowance for doubtful accounts, and other accrued expenses. The significant components of the provision for income taxes are as follows:
|  | Years Ended December 31, |
|  | 2017 |  | 2016 |  | 2015 |
|  | (In thousands) |
Current: |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 2,545 |  | $ | 5,616 |  | $ | 3,307 |
State |  |  | (255) |  |  | 1,010 |  |  | 784 |
Total current |  |  | 2,290 |  |  | 6,626 |  |  | 4,091 |
Total deferred |  |  | (8,210) |  |  | 2,247 |  |  | 2,481 |
Total Income Tax Provision |  | $ | (5,920) |  | $ | 8,873 |  | $ | 6,572 |
In addition, we recognized a tax expense (benefit) of ($100,000), $0, and $230,000 as a result of stock option exercises for the difference between compensation expense for financial statement and income tax purposes for the years ended December 31, 2017, 2016 and 2015, respectively. The reconciliation of income tax at the U.S. federal statutory tax rates to income tax expense (benefit) is as follows:
|  | Years Ended December 31, |
|  | 2017 |  | 2016 |  | 2015 |
|  | (In thousands) |
Tax expense at U.S. statutory rates |  | $ | 5,716 |  | $ | 7,665 |  | $ | 5,401 |
State tax expense (benefit), net of federal benefit |  |  | (769) |  |  | 926 |  |  | 760 |
Other, net |  |  | 633 |  |  | 282 |  |  | 411 |
Federal tax reform - deferred tax rate change |  |  | (11,500) |  |  | — |  |  | — |
|  | $ | (5,920) |  | $ | 8,873 |  | $ | 6,572 |
The 2017 effective tax rate differs from the federal statutory rate primarily due to the impacts of the Tax Act and state income tax benefit on current year earnings. The 2016 effective tax rate exceeds the federal statutory rate primarily due to state income taxes. The Company files income taxes in the U.S. federal jurisdiction, and in various state and local jurisdictions. The Company is no longer subject to U.S. federal examinations by the Internal Revenue Service (IRS) for years prior to 2014. During the first quarter of 2015, the IRS commenced an examination of the Company’s 2013 U.S. federal income tax return which was completed in the first quarter of 2016 and resulted in no changes to the return. The Company is subject to examination for income and non-income tax filings in various states. As of December 31, 2017, and 2016 there were no accrued balances recorded related to uncertain tax positions. We classify income tax-related interest and penalties as interest expense and corporate general and administrative expense, respectively. For the years ended December 31, 2017, 2016 and 2015, we had no tax-related interest or penalties and had $0 accrued at December 31, 2017 and 2016.

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