The following is a reconciliation between the
effective income tax rate for 2020 and 2019:
Statutory federal rate
State tax rate, net of federal benefits
Permanent differences
Amortization of investment tax credits
Effective tax rate
statutory federal income tax rate and the
2020
21.0 %
6.1
(63.6)
2.2
(34.3) %
2019
21.0 %
6.1
(33.9)
0.7
(6.1) %
The temporary items that give rise to the net deferred tax liability as of December 31, 2020
and 2019 were as follows:
(in thousands)
Liabilities:
Property-related, net
Other
Total liabilities
Assets:
Pension accrued liability
Net operating loss carryforward
Alternative minimum tax credit
NH Business Enterprise Tax credits
Other
Less valuation allowance
Total assets
2020
S$ 22,496
704
23,200
1,659
5,415
476
957
718
9,225
956
8,269
Net non-current deferred income tax liability $ 14,931
2019
$ 21,396
519
21,915
1,403
4,953
476
1,123
656
8,611
(1,123)
7,488
$ 14,427
The Company has accumulated federal net operating losses. The federal tax benefit of the
cumulative net operating losses is approximately $4 million, begin to expire in 2033, and is
included in deferred income taxes in the Consolidated Balance Sheet as of December 31,
2020. Approximately 88% of the net operating losses are 100 percent available to be applied
to taxable income in future years and are not subject to the TCJA as they were generated
prior to the 2018 tax year. The enactment of the TCJA now limits the net operating loss shelter
to 80 percent of taxable income, for post-2017 tax year losses. The TCJA also provides for net
operating losses to be carried forward indefinitely instead of limited to 20 years, as is the case
for pre-2018 losses; however, carrybacks of these losses are no longer permitted.
Approximately 12% of the net operating losses were generated in 2019 and 2020 and
therefore are subject to the 80% limitation.
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