Note 16 - Income Taxes
|12 Months Ended|
Dec. 31, 2019
|Notes to Financial Statements|
|Income Tax Disclosure [Text Block]||
The components of income tax expense are as follows:
The Company’s total income tax expense differs from the amounts computed by applying the Federal income tax statutory rates to income before income taxes. A reconciliation of the differences is as follows:
The components of net deferred tax asset are as follows:
The Company believes its net deferred tax asset is recoverable as of December 31, 2019 based on the expectation of future taxable income and other relevant considerations.
Pursuant to ASC 740-10-30-2 Income Taxes, deferred tax assets and liabilities are measured using enacted tax rates applicable to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. On December 22, 2017, the President of the United States signed the “Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018” (referred to as the “Tax Cuts and Jobs Act” or the Act). The Act provided for a reduction in the corporate tax rate from a maximum tax rate of 35% to a flat tax rate of 21% effective for tax years beginning after December 31, 2017. As a result, the Company revalued its deferred tax assets and liabilities as of December 31, 2017, and recorded the effect of this change as a component of tax expense. Tax expense recorded related to the change in the enacted federal tax rate was $3,108,000 in 2017.
The Company and its subsidiaries file a consolidated U.S. Federal income tax return and various consolidated and separate company state income tax returns. The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the years ended December 31, 2016 through 2019. The Company is also currently open to audit by several state departments of revenue for the years ended December 31, 2016 through 2019. The audit periods differ depending on the date the Company began business activities in each state. Currently, there are no years for which the Company filed a federal or state income tax return that are under examination by the IRS or any state department of revenue.
Accrued interest and penalties on unrecognized income tax benefits totaled $135,000 and $106,000 as of December 31, 2019 and 2018, respectively. Unrecognized income tax benefits as of December 31, 2019 and December 31, 2018, that, if recognized, would impact the effective income tax rate totaled $2,683,000 and $2,133,000 (net of the federal benefit on state income tax issues), respectively. The Company does not expect any of the uncertain tax positions to be settled or resolved during the next twelve months.
The following table presents a summary of the changes during 2019, 2018 and 2017 in the amount of unrecognized tax benefits that are included in the consolidated balance sheets.
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.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef