Note 10: Income Taxes



The components of the provision for income taxes consist of the following:







A majority of all of the Company's income is from domestic operations.



On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was enacted into law and the new legislation contains several key tax provisions that affected the Company, including, but not limited to, a reduction of the corporate income tax rate to 21% effective January 1, 2018 and a one-time mandatory transition tax on accumulated foreign earnings. The Company is required to recognize the effect of the tax law changes in the period of enactment, including determining the transition tax, re-measuring the Company’s U.S. deferred tax assets and liabilities and reassessing the net realizability of the Company’s deferred tax assets and liabilities. Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”) allows the Company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. Since the Tax Act was passed late in the fourth quarter of 2017, and ongoing guidance and accounting interpretation is expected over the next 12 months, the Company considers the accounting of the transition tax, deferred tax re-measurements, and other items to be provisional due to the forthcoming guidance and the Company’s ongoing analysis of final year-end data and tax positions. The Company expects to complete its analysis within the measurement period in accordance with SAB 118.



The following table reflects the effective income tax rate reconciliation for the years ended December 31, 2017,  2016 and 2015:

 



Components of net deferred income taxes are as follows at December 31:







The Company has not recorded United States deferred income taxes on approximately $0.7 million of its non-U.S. subsidiaries' undistributed earnings because such amounts are intended to be reinvested outside the United States indefinitely. The transition tax noted above will result in including the previously untaxed foreign earnings in the Company’s 2017 federal and state taxable income.  If these earnings were repatriated to the United States, the Company would be required to accrue and pay local country withholding taxes and potential United States state taxes.  The additional tax obligation associated with the repatriation of earnings generated outside of the United States would not have a material impact on the Company’s financial statements. As part of its ongoing analysis on the impacts of the Tax Act, the Company continues to analyze its potential tax liabilities. 



The Company records interest and penalties through income tax relating to uncertain tax positions. As of December 31, 2017,  2016 and 2015, the Company has not recognized any liabilities for uncertain tax positions nor has the Company accrued interest and penalties related to uncertain tax positions.



The Company's federal income tax returns for fiscal years 2015 through 2016 tax years are still subject to examination in the U.S. Various state and foreign jurisdiction tax years remain open to examination. The Company believes that any potential assessment would be immaterial to its financial statements.