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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Taxes [Abstract] |
Income Taxes | 13. INCOME TAXES The Company’s US and foreign pre-tax income is summarized in the table below: Amounts in thousands 2021 2020 2019Income before taxes: US $ 29,715 $ (45,927) $ (3,736)Foreign (1,566) 2,639 (8,231)Total income before taxes $ 28,149 $ (43,288) $ (11,967) The Company’s provision for income taxes is summarized as follows: For the year ended December 31, Amounts in thousands 2021 2020 2019US - Current $5,160 $270 $316US - Deferred — 973 (199)Provision for US income taxes $5,160 $1,243 $117 Foreign - Current $866 $1,130 $3,748Foreign - Deferred 345 2,475 309Provision for foreign income taxes $1,211 $3,605 $4,057Total provision for income taxes $6,371 $4,848 $4,174 The Company’s effective income tax rate differs from the statutory federal income tax rate as follows: Amounts in thousands202120202019US federal income tax statutory rate 21.0%(21.0%)(21.0%)Foreign income taxes(0.2%)(2.2%)6.8%State income tax (net of federal benefit)3.0%(3.8%)(0.3%)Meals, entertainment, gifts and giveaways0.4%—2.4%Statutory to US GAAP adjustments, including foreign currency2.6%(1.8%)3.7%Valuation allowance(4.6%)41.0%32.3%Unrecognized tax benefit(0.3%)——Stock options1.3%(0.1%)1.9%Tax Act impact——5.6%Permanent and other items(0.6%)(0.9%)3.5%Total provision for income taxes22.6%11.2%34.9% The Company’s effective income tax rate for the year ended December 31, 2021 was 22.6%. The comparison of pre-tax income of $28.1 million for the year ended December 31, 2021 compared to pre-tax loss of ($43.3) million for the year ended December 31, 2020 should be considered when comparing tax rates year-over-year. The federal corporate income tax rate in the United States for 2021 was 21%; additionally, the Company is subject to Colorado, Missouri and West Virginia state jurisdictions that had corporate tax rates ranging from 4.0% to 6.5% in 2021. The Company’s effective tax rate in the United States for 2021 was 17.4%, primarily due to the change in the valuation allowance of deferred tax assets established during 2020, as well as other permanent items such as nondeductible stock compensation and lobbying costs. The effective tax rate of (44.0%) related to 2021 losses in Canada, which has a 23.0% income tax rate, was due to various permanent addbacks and movement in the valuation allowance on Century Mile’s deferred tax assets. The effective tax rate of 28.4% related to 2021 earnings in Poland, which has a 19.0% income tax rate, was due to nondeductible payments to certain governing authorities as well as nondeductible meals, entertainment, gifts and giveaways. The effective tax rate of (42.1%) related to 2021 losses in Mauritius, which has a 15.0% income tax rate, was primarily driven by a valuation allowance of deferred tax assets recorded during 2021. The effective tax rate of (21.7%) related to 2021 losses in Austria, which has a 25.0% income tax rate, was due to various permanent addbacks, including the change in the valuation allowance recorded on the Company’s deferred tax assets during 2020. The movement of exchange rates for intercompany loans denominated in US dollars further impacts the effective income tax rate because foreign currency gains and losses generally are not taxed until realized. Therefore, the overall effective income tax rate can be impacted by foreign currency gains or losses in the future. The Tax Cuts and Jobs Act (the “Tax Act”) created requirements that certain income, such as global intangible low-taxed income (“GILTI”), earned by a controlled foreign corporation (“CFC”) must be included currently in the gross income of the CFC’s US shareholder, effective in 2018. Under US GAAP, the Company is allowed to make an accounting policy election of either (1) treating taxes due on future US inclusions in taxable income related to GILTI as a current period expense when incurred (the “period cost method”) or (2) factoring such amounts into the Company’s measurement of its deferred taxes (the “deferred method”). The Company has elected to account for GILTI in the year the tax is incurred as a current period expense and recorded a net tax expense of $0.5 million for the year ended December 31, 2019. There was no net tax expense related to GILTI for the years ended December 31, 2021 and 2020. The Company records deferred tax assets and liabilities based on the difference between the financial statement and income tax basis of assets and liabilities using the enacted statutory tax rate in effect for the year these differences are expected to be taxable or reversed. Deferred income tax expenses or credits are based on the changes in the asset or liability from period to period. The recorded deferred tax assets are reviewed for impairment on a quarterly basis by reviewing the Company’s internal estimates for future taxable income. The Company assesses the need for a valuation allowance based on its ability to realize the benefits of the Company’s deferred tax assets. The Company’s deferred income taxes at December 31, 2021 and 2020 are summarized as follows: Amounts in thousands 2021 2020Deferred tax assets (liabilities) - US Federal and state: Deferred tax assets Amortization of goodwill for tax $ 7,902 $8,416Amortization of startup costs — 13Financing obligation to VICI Properties, Inc. subsidiaries 68,342 67,712NOL carryforward — 2,506Operating and finance leases 329 488Accrued liabilities and other 861 590 77,434 79,725Valuation allowance (10,236) (12,371) $67,198 $67,354Deferred tax liabilities Property and equipment $ (66,616) $ (66,677)Operating and finance leases (313) (479)Prepaid expenses (269) (198) $ (67,198) $ (67,354)Long-term deferred tax asset $ — $ — Deferred tax assets (liabilities) - foreign Deferred tax assets Property and equipment $ 704 $ 810 NOL carryforward 6,331 5,179Accrued liabilities and other 1,018 854Contingent liability — 90Operating and finance leases 8,615 9,583Subsidiary liquidation 3,802 4,283Exchange rate gain 992 1,236 21,462 22,035Valuation allowance (10,088) (9,261) $ 11,374 $ 12,774Deferred tax liabilities Property and equipment $ (4,071) $ (4,044)Exchange rate loss (158) (199)Intangibles (1,110) (1,105)Operating and finance leases (7,894) (8,944)Others (501) (495) $ (13,734) $ (14,787)Long-term deferred tax liability $ (2,360) $ (2,013) The Company has analyzed filing positions in all of the US federal, state and foreign jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The Company has identified its US federal tax return, its state tax returns in Colorado, Missouri and West Virginia and its foreign tax returns in Canada and Poland as “major” tax jurisdictions, as defined by the Internal Revenue Code. The Company is not currently under an income tax audit in any US or foreign jurisdiction. However, any adjustment made by a taxing authority in the future could impact the effective tax rate. The Company’s income tax returns for the following periods are currently subject to examination: Jurisdiction Periods US Federal 2017-2020 US State - Colorado 2017-2020 US State – Missouri 2019-2020 US State – West Virginia 2019-2020 Canada 2006-2020 Mauritius 2018-2020 Poland 2016-2020 Austria 2016-2020 The Company had income tax net operating loss carryforwards related to its domestic and international operations of approximately $27.8 million as of December 31, 2021. The Company had recorded $6.3 million of deferred tax assets related to the net operating loss carryforwards, excluding the impact of the adjustments of valuation allowances and unrecognized tax benefits. The deferred tax assets expire as follows: Amounts in thousands 2021 - 2031 $2712032 - 2041 5,618No expiration 442Total deferred tax assets $6,331 Certain net operating loss carryforwards in the Company’s filed income tax returns include unrecognized tax benefits. The deferred tax assets recognized for those net operating loss carryforwards are presented net of these unrecognized tax benefits. As of December 31, 2021, the Company has accumulated undistributed earnings generated by its foreign subsidiaries that significantly exceed the approximately $32.1 million of cash and cash equivalents held by its foreign subsidiaries. Because substantially all of these accumulated undistributed earnings have previously been subject to the one-time transition tax on foreign earnings required by the Tax Act or have been subject to tax under the GILTI regime, any additional taxes due with respect to such earnings or the excess of the amount for financial reporting over the tax basis of the Company’s foreign investments would generally be limited to foreign and state taxes. The determination of the additional deferred taxes that would be provided for undistributed earnings has not been determined because the hypothetical calculation is not practicable. The Company intends, however, to indefinitely reinvest these earnings and expects its future US cash generation to be sufficient to meet its future US cash needs. As of December 31, 2021, the Company’s unrecognized tax benefit totaled $0.8 million. The net decrease in the current year unrecognized tax benefit is due to a change in foreign exchange rates as well as a lapse of statute of limitations. A portion of this adjustment has been recorded as a component of taxes payable in the accompanying consolidated balance sheet as of December 31, 2021. It is anticipated that certain tax positions, related to the Company’s ability to utilize pre-acquisition net operating losses, will decrease the Company’s balance of unrecognized tax benefits by approximately $0.2 million during 2022 and $0.5 million in 2023, due to lapse of statute of limitations. The Company may, from time to time, be assessed interest or penalties by major tax jurisdictions, although any such assessments historically have been minimal and immaterial to our financial results. The Company’s total amount of unrecognized tax benefit and changes to unrecognized tax benefit during the years ended December 31, 2021 and 2020 are summarized in the table below: Amounts in thousands 2021 2020Unrecognized tax benefit - January 1 $835 $821Gross increases - tax positions in prior period 3 14Gross decreases - tax positions in prior period — —Gross increases - tax positions in current period — —Settlements — —Lapse of statute of limitations (61) —Unrecognized tax benefit - December 31 $777 $835 The Company recognizes interest accrued related to unrecognized tax benefits and penalties as income tax expense. Related to the unrecognized tax benefits noted above, the Company accrued penalties and interest of less than $0.1 million during 2021 and 2020. The $0.8 million balance of unrecognized tax benefits, if recognized, would affect the effective tax rate.

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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=121826272&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=122134291&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=121826272&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=122134291&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=121826272&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 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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