Annual report pursuant to Section 13 and 15(d)

Income Taxes

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Income Taxes
12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Income Taxes
9. INCOME TAXES
Income before income tax expense (benefit) and equity in earnings (losses) of 50% or less owned companies derived from U.S. and foreign companies for the years ended December 31, were as follows (in thousands):
2019 2018 2017
United States $ 41,398    $ 33,563    $ 28,546   
Foreign 6,182    56,558    4,748   
Eliminations and other 1,517    1,568    1,911   
$ 49,097    $ 91,689    $ 35,205   
The Company files a consolidated U.S. federal tax return. The components of income tax expense (benefit) for the years ended December 31, were as follows (in thousands):
2019 2018 2017
Current:
State $ 739    $ 253    $ 1,136   
Federal (244)   20,776    (17,181)  
Foreign 1,165    2,899    333   
1,660    23,928    (15,712)  
Deferred:
State 404    (3,001)   12   
Federal 7,765    (12,512)   (51,489)  
8,169    (15,513)   (51,477)  
$ 9,829    $ 8,415    $ (67,189)  
The following table reconciles the difference between the statutory federal income tax rate for the Company and the effective income tax rate for the years ended December 31,:
2019 2018 2017
Statutory rate 21.0  % 21.0  % 35.0  %
Income subject to tonnage tax (2.3) % (1.3) % (5.9) %
Dorian distribution —  % —  % 22.8  %
Reversal of uncertain tax position —  % —  % (28.7) %
U.S. federal income tax statutory changes —  % —  % (190.2) %
Non-deductible expenses 1.6  % 0.2  % 0.8  %
Noncontrolling interests (3.1) % (5.7) % (22.4) %
Foreign earnings not subject to U.S. income tax (4.1) % (16.2) % —  %
Foreign taxes not creditable against U.S. income tax 1.4  % 3.2  % —  %
Losses of foreign subsidiaries not benefited —  % —  % (6.6) %
Subpart F income 1.5  % 12.1  % —  %
State taxes 2.0  % (3.1) % 1.2  %
Share award plans 0.6  % (0.3) % 2.0  %
Other 1.4  % (0.7) % 1.1  %
20.0  % 9.2  % (190.9) %
On December 22, 2017, the U.S. enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, reducing the U.S. federal corporate tax rate from 35% to 21%, eliminating or capping certain deductions, imposing a mandatory one-time tax on accumulated earnings in foreign subsidiaries, introducing new tax regimes and changing how foreign earnings are subject to U.S. taxation. The statutory corporate tax rate reduction is effective for tax years beginning on or after January 1, 2018. During the year ended December 31, 2017, the Company recorded a net income tax benefit of $66.9 million as a consequence of reducing its net deferred tax liabilities to reflect the change in the statutory tax rate.
During the year ended December 31, 2013, the Company provided for income taxes of $10.1 million relating to potential tax exposures surrounding the spin-off of Era Group Inc. (“Era Group”) by means of a dividend to SEACOR’s shareholders of all the issued and outstanding common stock of Era Group. During the year ended December 31, 2017, the Company reversed this provision as the statute of limitations expired. In addition, the Company reversed accumulated accrued interest of $2.0 million related to this provision, included as a reduction in interest expense in the accompanying consolidated statements of income.
The components of the net deferred income tax liabilities for the years ended December 31, were as follows (in thousands):
2019 2018
Deferred tax liabilities:
Property and equipment $ 121,840    $ 93,049   
Long-term debt 15,395    18,355   
Gains on marketable securities 459    —   
Investments in 50% or less owned companies 1,541    1,934   
Intangible assets 706    614   
Deductible goodwill 1,002    344   
Other —    31   
Total deferred tax liabilities 140,943    114,327   
Deferred tax assets:
Net operating loss carryforwards 21,385    —   
Capital loss carryforwards 5,192    —   
Share award plans 3,686    3,711   
Losses on marketable securities —    8,596   
Debt and equity issuance costs 515    379   
Other 8,721    11,178   
Total deferred tax assets 39,499    23,864   
Valuation allowance (4,217)   (3,957)  
Net deferred tax assets 35,282    19,907   
Net deferred tax liabilities $ 105,661    $ 94,420   
During the year ended December 31, 2019, the Company increased its valuation allowance for state net operating loss carryforwards from $4.0 million to $4.2 million. The Company's capital loss carryforwards expire in 2024.