The following is a reconciliation between the statutory federal income tax rate and the effective
income tax rate for 2018 and 2017:
2018 2017
Statutory federal rate 21.0% 34.0%
State tax rate, net of federal benefits 6.2% 6.2%
Permanent differences -75.7% -15.8%
Tax rate change 0.0% -45.8%
Amortization of investment tax credits 0.9% 0.6%
Effective tax rate -47.6% -20.8%
The temporary items that give rise to the net deferred tax liability as of December 31, 2018
and 2017 were as follows:
(in thousands) 2018 2017
Liabilities:
Property-related, net $ 20,682 $ 19,967
Other 424 373
Total liabilities 21,106 20,340
Assets:
Pension accrued liability 1,272 1,186
Net operating loss carryforward 4,556 5,042
Alternative minimum tax credit 476 476
NH Business Enterprise Tax credits 997 853
Other 692 789
7,993 8,346
Less valuation allowance (997) (853)
Total assets 6,996 7,493
Net non-current deferred income tax liability $ 14,110 $ 12,847
The Company has accumulated federal net operating losses. The federal tax benefit of the
cumulative net operating losses is approximately $3.4 million, begin to expire in 2032, and is
included in deferred income taxes in the Consolidated Balance Sheet as of December 31, 2018.
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.
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