v2.4.0.6
Income Taxes
 12 Months Ended
Dec. 31, 2012
Income Taxes [Abstract]  
Income Taxes

5. Income Taxes

The provisions for income tax expense are summarized as follows for the years ended December 31:

 

                         

In Thousands of Dollars

   2012     2011     2010  

Current:

                        

Federal

   $ 14,609     $ 15,098     $ 11,268  

State

     1,041       986       662  

Deferred

     (6,085 )      9,980       (4,801 ) 
   

 

 

    

 

 

    

 

 

  

Total Income Tax Expense

   $ 9,565     $ 26,064     $ 7,129  
   

 

 

    

 

 

    

 

 

  

The differences between the provision for income taxes and income taxes computed using the federal income tax rate are as follows for the years ended December 31:

 

                         

In Thousands of Dollars

   2012     2011     2010  

Amount computed using the statutory rate

   $ 10,282     $ 26,668     $ 7,847  

State income taxes, net of federal tax benefit

     463       990       263  

Qualified domestic production activity deduction

     (1,522 )      (1,511 )      (1,198 ) 

Other items

     342       (83 )      217  
   

 

 

    

 

 

    

 

 

  

Total Income Tax Expense

   $ 9,565     $ 26,064     $ 7,129  
   

 

 

    

 

 

    

 

 

  

In October 2004, the American Jobs Creation Act of 2004 (“the Act”) was passed, which provides a deduction for income from qualified domestic production activities. This deduction lowered the Company’s effective tax rate by $1,522,000, $1,511,000 and $1,198,000 or approximately 5.1%, 2.0% and 5.3% for 2012, 2011 and 2010, respectively.

 

The tax effect of each type of temporary difference giving rise to the net deferred tax liability at December 31, 2012 and 2011 is as follows:

 

                                 
    Deferred Tax Asset (Liability)  
    2012     2011  

In Thousands of Dollars

   Current     Non-current     Current     Non-current  

Depreciation

   $ —       $ (16,945 )    $ —       $ (15,833 ) 

Inventory

     4,313       —         (2,748 )      —    

Allowance for doubtful accounts

     748       —         762       —    

Uniform capitalization rules

     350       —         259       —    

Other

     378       —         319       —    
   

 

 

    

 

 

    

 

 

    

 

 

  

Deferred income tax asset (liability)

   $ 5,789     $ (16,945 )    $ (1,408 )    $ (15,833 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

The Company made income tax payments of $15.0 million in 2012, $16.9 million in 2011 and $7.8 million in 2010.

The Company’s federal income tax returns for the years subsequent to December 31, 2008 remain subject to examination. The Company’s income tax returns in major state income tax jurisdictions remain subject to examination for various periods subsequent to December 31, 2007. The Company has no reserves for uncertain tax positions as of December 31, 2012. Interest and penalties resulting from audits by tax authorities have been immaterial and are included in the provision for income taxes in the consolidated statements of income.

The American Taxpayer Relief Act of 2012 was enacted on January 2, 2013. Included within this legislation was an extension of the research and development credit which had previously expired on December 31, 2011. This legislation retroactively reinstates and extends the credit from the previous expiration date through December 31, 2013. As the legislation was not enacted until 2013, the income tax impact of the retroactive reinstatement and extension will not be recognized until the first quarter of 2013. If the tax impact of the research and development credit had been recognized in 2012, it would represent a $77,000 tax benefit

In addition, the American Taxpayer Relief Act of 2012 renewed the alternative fuels tax credit. The income tax impact of the retroactive reinstatement and extension will not be recognized until the first quarter of 2013. If the tax impact of the alternative fuels tax credit had been recognized in 2012, it would represent a $127,000 tax benefit.