Note 7. Income Taxes 



The provision for income taxes for the years ended December 31, 2017, 2016 and 2015 consists of the following (in millions):



   

The Tax Cuts and Jobs Act (the “Tax Act’) was signed into law on December 22, 2017. The Tax Act significantly revises the U.S. corporate income tax by, among other things, lowering the statutory corporate tax rate from 35% to 21% and eliminating certain deductions. The Tax Act also enhanced and extended through 2026 the option to claim accelerated depreciation deductions on qualified property. Due to the timing of the enactment and the complexity involved in applying the provisions of the Tax Act, the Company has not completed its determination of the accounting implications of the Tax Act on its income tax accruals. However, the Company has reasonably estimated the effects of the Tax Act on its existing deferred tax assets and liabilities and recognized a provisional benefit for income taxes of $18.0 million, or $0.44 per diluted share, for the year ended December 31, 2017. This amount is primarily comprised of the remeasurement of federal net deferred tax assets and liabilities resulting from the permanent reduction in the U.S. statutory corporate tax rate to 21% from 35%.  As the Company completes its analysis of the Tax Act, including the collection of data and interpretation of any additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service (“IRS”), and other standard-setting bodies, it may make adjustments to the provisional amounts. Those adjustments may materially impact the Company’s provision for income taxes in the period in which the adjustments are made.

The increase in the valuation allowance during the year ended December 31, 2017 was primarily the result of state net operating loss carry forwards that management believes, after evaluation of the four sources of income pursuant to ASC 740, may not be fully utilized because of the uncertainty regarding the Company’s ability to generate taxable income in certain separate return filing states. Various subsidiaries have separate return state net operating loss carry forwards in the aggregate of approximately $1.3 billion, primarily in Alabama, Florida, Georgia, Indiana, Louisiana, Mississippi, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia, and West Virginia, with expiration dates through the year 2037.

The following is a reconciliation of the statutory federal income tax rate to the Company’s effective income tax rate for income before income taxes and excluding net income from non-controlling interests for the years ended December 31, 2017, 2016 and 2015:





Deferred income taxes result from temporary differences in the recognition of assets, liabilities, revenues and expenses for financial accounting and tax purposes. Sources of these differences and the related tax effects are as follows as of December 31, 2017 and 2016 (in millions):



The Company had a receivable for income taxes of $7.6 million at December 31, 2017 which is included under the caption “Other current assets” in the accompanying consolidated balance sheet.  The Company had a payable for income taxes of $47.8 million at December 31, 2016 which is included under the caption “Other current liabilities” in the accompanying consolidated balance sheet.  The Company’s liability for unrecognized tax benefits was nominal at December 31, 2017 and 2016.

The Company’s U.S. federal income tax returns for tax years 2014 and beyond remain subject to examination by the IRS, and its federal income tax return for the tax year ended December 31, 2014 is currently under examination by the IRS.  The Company expects the audit to be finalized during calendar year 2018.  The expiration of the statutes of limitation related to the various state income tax returns that the Company and its subsidiaries file, varies by state.  Generally, the Company’s various state income tax returns for tax years 2011 and beyond remain subject to examination by various state taxing authorities.