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Income Taxes | 12 Months Ended
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Sep. 30, 2020
Income Tax Disclosure [Abstract] |
Income Taxes |
1 2. | Income Taxes
The provision (benefit) for income taxes consists of the following:
|  | Years Ended September 30, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
|  | (in thousands) |
Current |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | (138 | ) |  | $ | — |
State |  |  | 297 |  |  |  | 341 |  |  |  | 465 |
|  | $ | 297 |  |  | $ | 203 |  |  | $ | 465 |
Deferred |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 8,404 |  |  |  | 13,238 |  |  |  | (17,308 | )
State |  |  | 830 |  |  |  | 2,265 |  |  |  | (583 | )
|  | $ | 9,234 |  |  | $ | 15,503 |  |  | $ | (17,891 | )
Provision (Benefit) for income taxes |  | $ | 9,531 |  |  | $ | 15,706 |  |  | $ | (17,426 | )
Reconciliation between the effective tax rate on income from continuing operations and the statutory tax rate is as follows:
|  | Years Ended September 30, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
|  | (in thousands) |
Income tax expense at federal statutory rate |  | $ | 7,769 |  |  | $ | 13,290 |  |  | $ | 3,878 |
Increase (reduction) in income taxes resulting from: |  |  |  |  |  |  |  |  |  |  |  |
State taxes, net of federal tax benefit |  |  | 968 |  |  |  | 1,785 |  |  |  | 660 |
Nondeductible stock compensation expenses |  |  | 524 |  |  |  | (21 | ) |  |  | — |
Permanent items |  |  | 314 |  |  |  | 261 |  |  |  | 63 |
Change in valuation allowances |  |  | 1,173 |  |  |  | (50 | ) |  |  | (646 | )
US Tax Cuts and Jobs Act Impact |  |  | — |  |  |  | — |  |  |  | (22,015 | )
162(m) Limitation |  |  | 14 |  |  |  | 119 |  |  |  | — |
Impact of changing rates on deferred tax assets |  |  | (2,313 | ) |  |  | 484 |  |  |  | (773 | )
Expired tax attributes |  |  | 633 |  |  |  | 111 |  |  |  | 1,088 |
Other |  |  | 449 |  |  |  | (273 | ) |  |  | 319 |
Income tax expense (benefit) |  | $ | 9,531 |  |  | $ | 15,706 |  |  | $ | (17,426 | )
The Company's deferred tax assets as of September 30, 2020 and 2019 are as follows:
|  | Years Ended September 30, |
|  | 2020 |  |  | 2019 |
|  | (in thousands) |
Net operating carry forwards |  | $ | 113,402 |  |  | $ | 106,645 |
Deferred credits |  |  | 1,485 |  |  |  | 1,882 |
Other accrued expenses |  |  | 2,842 |  |  |  | 2,329 |
Prepaids and other |  |  | 1,632 |  |  |  | 2,576 |
State alternative minimum tax |  |  | 1 |  |  |  | 1 |
Other reserves and estimated losses |  |  | 641 |  |  |  | 947 |
Operating lease |  |  | 24,263 |  |  |  | 4,928 |
Subtotal |  | $ | 144,266 |  |  | $ | 119,308 |
Less: valuation allowance |  |  | (3,063 | ) |  |  | (1,890 | )
Total net deferred tax assets |  | $ | 141,203 |  |  | $ | 117,418 |
Intangibles |  |  | (1,830 | ) |  |  | (2,204 | )
ROU Lease |  |  | (19,210 | ) |  |  | — |
Property and equipment |  |  | (184,438 | ) |  |  | (170,517 | )
Total deferred tax liabilities |  | $ | (205,478 | ) |  | $ | (172,721 | )
Net deferred tax liability |  | $ | (64,275 | ) |  | $ | (55,303 | )
The Company has federal and state income tax NOL carryforwards of $512.4 million and $223.9 million, which expire in fiscal years 2027-2038 and 2021-2040, respectively. Approximately, $94.0 million of our federal NOL carryforwards are not subject to expiration. These NOL carryovers, if not utilized prior to fiscal 2022, are only available to offset 80% of taxable income in years in which they are utilized due to tax law changes as a result of the Tax Cuts and Jobs Act. As a result of the CARES Act, the Company is able to offset one hundred percent of taxable income with available net operating losses generated after fiscal 2018, but only if these net operating losses are utilized prior to fiscal 2022. The Company believes that it is more likely than not that the benefit from certain state NOL carryforwards will not be realized. In recognition of this risk, the Company has provided a valuation allowance of $3.1 million in fiscal year 2020 and $1.9 million in fiscal year 2019 on the deferred tax assets related to these state NOL carryforwards. If or when recognized, the tax benefits related to any reversal of the valuation allowance on deferred tax assets will be recognized as a reduction of income tax expense. The federal and state NOL carryforwards in the income tax returns filed included unrecognized tax benefits. The deferred tax assets recognized for those NOLs are presented net of these unrecognized tax benefits. Because of the change of ownership provisions of the Tax Reform Act of 1986, use of a portion of our NOL and tax credit carryforwards may be limited in future periods. Further, a portion of the carryforwards may expire before being applied to reduce future income tax liabilities. The Company determined it had an ownership change in February of 2009. Based on the study conducted at that time, a portion of the federal NOLs were determined to be limited by IRC Section 382, resulting in the Company writing off a portion of its NOLs at that time. Additionally, the Company’s initial public offering in August of 2018 resulted in a change in ownership under Section 382 of the Internal Revenue Code. Based on the value of the Company’s stock valuation as of the initial public offering date, the Company does not believe any further limitation on the utilization of the Company's current net operating losses would be applicable as of September 30, 2020. The following is a tabular reconciliation of the total amounts of unrecognized tax benefits:
|  | Years Ended September 30, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
|  | (in thousands) |
Unrecognized tax benefits — October 1 |  | $ | 4,688 |  |  | $ | 4,688 |  |  | $ | 7,547 |
Gross decreases — tax positions in prior period |  |  | — |  |  |  | — |  |  |  | (2,859 | )
Gross increases — tax positions in prior period |  |  | 178 |  |  |  | — |  |  |  | — |
Unrecognized tax benefits — September 30 |  | $ | 4,866 |  |  | $ | 4,688 |  |  | $ | 4,688 |
The Company’s unrecognized tax benefits of $4.9 million, $4.7 million and $4.7 million as of September 30, 2020, 2019 and 2018, respectively, is included the net deferred tax assets. If recognized, the balance of the uncertain tax benefit would affect the effective tax rate. We recognize interest accrued related to unrecognized tax benefits and penalties as income tax expense. We have not recorded accrued penalties or interest related to the unrecognized tax benefits noted above as the amounts would result in an adjustment to NOL carry forwards. We are subject to taxation in the United States and various states. As of September 30, 2020, the Company is no longer subject to U.S. federal or state examinations by taxing authorities for fiscal years prior to 2000.

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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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