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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of income tax benefit are as follows:
Year Ended December 31,
In thousands20242023
Current
Federal$— $(10)
State and local428 264 
Foreign1,214 871 
Total current$1,642 $1,125 
Deferred
Federal$(7,729)$(1,340)
State and local(1,446)(216)
Foreign(104)82 
Total deferred$(9,279)$(1,474)
Total income tax benefit$(7,637)$(349)
The U.S. and foreign components of loss before income taxes were as follows:
Year Ended December 31,
In thousands20242023
United States$(43,860)$(7,546)
Foreign5,926 5,627 
Total loss before income taxes$(37,934)$(1,919)
The provision (benefit) for income taxes is based on the various rates set by federal, foreign and local authorities and is affected by permanent and temporary differences between financial accounting and tax reporting requirements. The principal reasons for the difference between the statutory rate and the annual effective rate for 2024 and 2023 were the state taxes, change in valuation allowance, federal and foreign income tax credits and the benefit of excess stock benefits on vested restricted stock, offset by flow-through partnership income from a United Kingdom affiliate.
The differences between total income tax benefit and the amount computed by applying the statutory federal income tax rate of 21% to income (loss) before income taxes were as follows:
Year Ended December 31,
In thousands20242023
Computed expected income tax benefit$(7,966)$(403)
Net effect of state income taxes(1,885)(206)
Foreign subsidiary dividend inclusions666 507 
Foreign tax rate differential42 (257)
Change in valuation allowance991 (562)
Return to Provision599 706 
Change in Rate(125)165 
Credits(346)(543)
Adjustments to State Attributes565 (137)
Other Adjustments, net(178)381 
Income tax benefit$(7,637)$(349)
The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and liabilities were as follows:
Year Ended December 31,
In thousands20242023
Deferred tax assets
Deferred compensation and retirement plan$— $9,667 
Accrued expenses not deductible until paid173 1,177 
Lease liability6,201 6,979 
Investment in foreign subsidiaries, outside basis difference1,930 1,604 
Interest Expense limitations1,167 971 
Other, net1,979 1,320 
Foreign net operating loss carryforwards1,325 1,382 
State net operating loss carryforwards7,709 5,309 
Federal net operating loss carryforwards9,585 — 
Foreign tax credit carryforwards3,726 3,730 
General Business Credit Carryovers591 538 
Total gross deferred tax assets34,386 32,677 
Less valuation allowances(8,082)(7,091)
Net deferred tax assets$26,304 $25,586 
Deferred tax liabilities
Property, plant and equipment$(1,143)$(1,485)
Deferred compensation and retirement plan(3,394)— 
Right-of-use asset(5,624)(6,144)
Other, net(966)(689)
Total gross deferred tax liabilities(11,127)(8,318)
Net deferred tax assets $15,177 $17,268 
In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. After considering the weight of available evidence, both positive and negative, the Company concluded that it is more-likely-than-not that it will realize the majority of its U.S. deferred tax assets. Certain foreign tax credits as well as certain state net operating loss carryovers will continue to have a valuation allowance until there is substantial evidence that enough future taxable income exists at a more likely than not level in order to utilize those deferred tax assets. The valuation allowance for deferred tax assets was $8.1 million and $7.1 million as of December 31, 2024 and 2023, respectively. The change in the valuation allowance was $1.0 million for the year ended December 31, 2024.
We or one of our subsidiaries file income tax returns in the U.S. federal, U.S. state, and foreign jurisdictions. For U.S. state, federal and foreign returns, we are no longer subject to tax examinations for years prior to 2019.
There is no balance of unrecognized tax benefits as of December 31, 2024 and 2023. Any adjustments to this liability as a result of the finalization of audits or potential settlements would not be material.
We have elected to classify any interest and penalties related to income taxes within income tax expense in our Consolidated Statements of Comprehensive Income. There are no interest and penalties related to income taxes for the year ended December 31, 2024 and 2023.
For U.S. tax return purposes, net operating losses and tax credits are normally available to be carried forward to future years, subject to limitations as discussed below.
As of December 31, 2024, the Company has federal NOL carryforwards of $45.6 million. The entire amount was generated in 2024 and will be carried over indefinitely, but will generally limit the net operating deduction to the lesser of the net operating loss carryforward or 80% of a corporation's taxable income (subject to Section 382 of the Internal Revenue Code of 1986, as amended).
The Company also has state NOL carryforward of $153.9 million and foreign NOL carryforwards of $4.3 million. The federal foreign tax carryforward credits of $3.7 million will expire on various dates from 2027 to 2035. General business credit carryforwards of $0.6 million will begin to expire on various dates from 2037 to 2045. Under Section 163(j) of the Internal Revenue Code, the deduction for business interest expense is limited to the sum of business interest income, 30% of adjusted taxable income, and floor plan financing interest. Any business interest expense that is disallowed due to the limitation can be carried forward indefinitely to future years. As of December 31, 2024 and 2023, the Company has disallowed business interest expense carryforwards of $3.8 million and $4.4 million, respectively.
Deferred income taxes have not been provided on the undistributed earnings of our foreign subsidiaries as these earnings have been, and under current plans will continue to be, permanently reinvested in these subsidiaries. It is not practicable to estimate the amount of additional taxes which may be payable upon the distribution of these earnings. However, because of the provisions in the Tax Reform Act, the tax cost of repatriation is immaterial and limited to foreign withholding taxes, currency translation and state taxes.