NOTE 12. INCOME TAXES
In December 2015, we converted Belden from a corporation into a single member limited liability company. As a result, the $13.4 million of deferred taxes recorded in the acquisition of Belden were realized. The benefit was offset by an $11.7 million current tax liability for the estimated federal and state taxes based on the fair value of Belden as of the date of conversion. As of December 31, 2015, Belden is no longer a tax paying entity.
Income taxes were as follows for the year ended December 31, 2015:
|
|
|||
|
Current: |
|||
|
Federal |
$ |
11,207 | |
|
State |
235 | ||
|
|
11,442 | ||
|
Deferred: |
|||
|
Federal |
(12,482) | ||
|
State |
(803) | ||
|
|
(13,285) | ||
|
|
$ |
(1,843) |
Of the $236.0 million of loss from continuing operations before income taxes for the year ended December 31, 2015, $45.7 million represents the loss that is subject to federal taxation.
The effective tax rate on the loss subject to federal taxation differs from the U.S. statutory rate as follows for 2015:
|
|
|||
|
Income taxes at U.S. statutory income tax rate |
$ |
(15,986) | |
|
Impairment of Belden goodwill |
15,989 | ||
|
Belden deferred tax liability released at conversion |
(2,070) | ||
|
State income taxes, net of federal tax benefit |
224 | ||
|
Income taxes |
$ |
(1,843) |
Our tax filings for four years are subject to examination by federal and state tax authorities where we conduct our business. These examinations may result in assessments of additional tax that are resolved with the authorities or through the courts. We have evaluated whether any material tax position we have taken will more likely than not be sustained upon examination by the appropriate taxing authority. As we believe that all such material tax positions we have taken are supportable by existing laws and related interpretations, we believe there are no material uncertain tax positions to consider.
In 2016, we recorded approximately $2.4 million of tax benefits as a result of tax refunds and lower taxes.