The following is a reconciliation between the statutory federal income tax rate and the
effective income tax rate for 2020 and 2019:
2020 2019
Statutory federal rate 21.0 % 21.0 %
State tax rate, net of federal benefits 6.1 6.1
Permanent differences (63.6) {33.9)
Amortization of investment tax credits 2.2 0.7
Effective tax rate (34.3) % (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) 2020 2019
Liabilities:
Property-related, net S 22,496 $ 21,396
Other 704 519
Total liabilities 23,200 21,915
Assets:
Pension accrued liability 1,659 1,403
Net operating loss carryforward 5,415 4,953
Alternative minimum tax credit A476 476
NH Business Enterprise Tax credits 957 1,123
Other 718 656
9,225 8,611
Less valuation allowance (956) (1,123)
Total assets 8,269 7,488
Net non-current deferred income tax liability $ 14,931 S$ 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.
121
