Income Taxes

12 Months Ended

Dec. 31, 2019

(16)	Income Taxes

Income tax expense is as follows:


	Year ended December 31,
	2018		2019
Current:
Federal	$	3,043,583	$	6,258,953
State		902,863		2,092,750

		3,946,446		8,351,703
Deferred:
Federal		2,741,821		(1,607,189	)
State		5,007,279		(146,763	)

		7,749,100		(1,753,952	)

	$	11,695,546	$	6,597,751

Income tax expense differs from the amounts that would result from applying the federal statutory rate of 21% to the Company’s income before taxes as follows:


	Year ended December 31,
	2018		2019
Expected tax expense	$	3,817,085	$	4,166,309
State income taxes, net of federal benefit		1,957,508		4,263,192
Gain on merger		927,344		—
Tax rate adjustments		294,924		290,381
Change in valuation allowance		3,432,284		(3,450,458	)
Non-deductible items		1,140,948		1,055,121
Other		125,453		273,207

	$	11,695,546	$	6,597,751

Temporary differences that give rise to the components of deferred tax assets and liabilities are as follows:


	December 31,
	2018			2019
Deferred tax assets:
Allowance for doubtful accounts	$	530,744		$	567,702
Other assets		(1,647,113	)		(979,560	)
Accrued expenses		412,165			786,001
Other long-term liabilities		2,729,442			2,663,792
Stock-based compensation		141,960			149,087
Net operating losses		3,726,364			94,878

Subtotal		5,893,562			3,281,900
Valuation allowance		(3,760,454	)		(311,214	)

Total		2,133,108			2,970,686

Deferred tax liabilities:
Prepaid expenses		(99,187	)		(91,665	)
Property and equipment		(2,858,163	)		(1,827,323	)
Intangibles		(122,088,303	)		(122,182,694	)

Total		(125,045,653	)		(124,101,682	)

Net deferred tax liabilities	$	(122,912,545	)	$	(121,130,996	)

As of December 31, 2019, the Company has state net operating losses of $1.5 million, which expire in 2031.

As of December 31, 2018 and 2019, the Company does not have any material unrecognized tax benefits and accordingly has not recorded any interest or penalties related to unrecognized tax benefits. The Company and its subsidiaries file a consolidated federal income tax return and various state returns. These returns remain subject to examination by taxing authorities for all years after 2015.

In the fourth quarter of 2019, the Internal Revenue Service completed an examination of the Company’s 2015, 2016 and 2017 federal income tax returns that resulted in no changes to the returns.