Entity information:
14
)        Provision/(benefit) for income taxes
 
Th
e following table summarizes the provision/(benefit) for income taxes:
 
   
2017
    
2016
    
2015
  
Income before taxes - U.S.
   $
16,649
     $
40,806
     $
51,869
  
Provision for income taxes:
                        
Current
    
5,766
      
(13,014
 )    
7,475
  
Deferred
    
(12,213
 )    
(1,437
 )    
(2,283
 )
State and other
                        
Current
    
560
      
(1,120
 )    
487
  
Deferred
    
(975
 )    
36
      
(231
 )
Total
   $
(6,862
 )   $
(15,535
 )   $
5,448
  
 
Difference
s between the provision/(benefit) for income taxes computed using the U.S. federal statutory income tax rate were as follows:
 
   
2017
    
2016
    
2015
  
Amount computed using the statutory rate of 35%
   $
5,788
     $
14,282
     $
18,154
  
Section 199 manufacturing deduction
    
(85
 )    
-
      
(163
 )
Agri-biodiesel production credit
    
-
      
(975
 )    
(975
 )
Federal excise tax benefit
    
-
      
(20,048
 )    
(9,958
 )
State excise tax benefit
    
-
      
(6,845
 )    
(792
 )
Credit for increasing research activities
    
(127
 )    
(56
 )    
(51
 )
Dividends received deduction
    
(865
 )    
(730
 )    
(427
 )
State income taxes, net
    
463
      
(1,262
 )    
695
  
Tax (benefit)/expense recorded as a decrease/increase in unrecognized tax benefit
    
191
      
193
      
(747
 )
Tax Cuts and Jobs A
ct of 2017 impact
    
(12,066
 )    
-
      
-
  
Other
    
(161
 )    
(94
 )    
(288
 )
Provision (benefit) for income taxes
   $
(6,862
 )   $
(15,535
 )   $
5,448
  
 
FutureFuel
’s effective tax rate for the year
December 31, 2016
reflects the positive effect of the reinstatement of certain tax credits and incentives for
2016,
the most significant of which were the BTC and Small Agri-biodiesel Producer Tax Credit.  The BTC and Small Agri-biodiesel Producer Tax Credit present in
2016
were
not
extended during
2017.
However, these credits and incentives were retroactively extended for
2017
(but,
not
beyond
2017
) on
February 9, 2018.
The tax benefit of this retroactive extension for
2017
will be recorded in FutureFuel’s
first
quarter
2018
results.
 
On
December 22, 2017,
The Tax Cuts and Jobs Act of
2017
(“The Act”) was enacted. The Act provides for a decrease in the overall federal tax rate from
35%
to
21%
effective
January 1, 2018.
As a result of the Act, FutureFuel has recognized a
one
-time
$12,066
income tax benefit due to an anticipated lower tax rate for future reversals of deferred tax liabilities.
 
 
Th
e significant components of deferred tax assets and liabilities were as follows as of
December 31:
 
   
2017
    
2016
  
Deferred tax assets
                
Inventory reserves
   $
502
     $
1,149
  
Self insurance
    
63
      
90
  
Asset retirement obligation
    
201
      
299
  
Deferred revenue
    
4,809
      
9,388
  
State net operating loss carryforwards
    
609
      
-
  
Accrued expenses
    
1,674
      
-
  
Stock based compensation
    
143
      
77
  
Derivative instruments
    
252
      
90
  
Other
    
-
      
2,546
  
Total deferred tax assets
    
8,253
      
13,639
  
Deferred tax liabilities
                
Available for sale securities
    
(2,285
 )    
(1,376
 )
LIFO inventory
    
(3,342
 )    
(5,821
 )
Depreciation
    
(23,293
 )    
(38,293
 )
Other
    
(382
 )    
(213
 )
Total deferred tax liabilities
    
(29,302
 )    
(45,703
 )
Valuation allowance
    
-
      
-
  
Net
noncurrent deferred tax liabilities
   $
(21,049
 )   $
(32,064
 )
 
   
2017
    
2016
  
As recorded in the consolidated balance sheet
                
Noncurrent deferred tax liability
   $
(21,049
 )   $
(32,064
 )
 
Prior
to
2013,
FutureFuel had historically included revenue from the biodiesel BTC in taxable income on its federal and state income tax returns. In
2013,
as a result of then recently issued technical guidance from the U.S. Internal Revenue Service, FutureFuel changed its position related to the benefit from the biodiesel BTC to exclude this credit from taxable income for
2010
and all future years. 
Please see
Note
3
for a discussion of the impact of the BTC for the years ended
December 31, 2015,
2016
and
2017.
 
FutureFue
l’s unrecognized tax benefits totaled
$0
and
$2,056
at
December 31, 2017
and
2016,
respectively.
 
The
following table summarizes FutureFuel’s unrecognized tax benefits activity.
 
   
2017
    
2016
    
2015
  
Balance at January 1
   $
2,056
     $
4,588
     $
2,981
  
Increases to tax positions taken in the current year
    
-
      
2,056
      
1,471
  
Increases to tax positions taken in a prior year
    
-
      
-
      
3,117
  
Decrease due to resolution of tax positions taken in a prior year
    
(2,056
 )    
(4,588
 )    
(2,981
 )
Balance at December 31
   $
-
     $
2,056
     $
4,588
  
 
FutureFue
l does
not
expect its unrecognized tax benefits to change significantly over the next
12
months.
 
FutureFue
l records interest and penalties net as a component of income tax expense. FutureFuel accrued balances of
$0
and
$193
at
December 31, 2017
and
2016,
respectively, for interest or tax penalties.
 
FutureFuel and its subsidiaries file tax returns in the U.S. federal jurisdiction and with various state jurisdictions. In general, FutureFuel is subject to U.S., state, and local examinations by tax authorities from
2014
forward. In the
fourth
quarter of
2017,
the IRS notified FutureFuel it has been selected for an audit of its
2015
federal return. The audit process commenced in
January
2018.