Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

v3.20.1
Income Taxes
3 Months Ended
Mar. 31, 2020
Income Tax Disclosure [Abstract]  
Income Taxes
7. INCOME TAXES
The following table reconciles the difference between the statutory federal income tax rate and the Company's effective income tax rate for the three months ended March 31, 2020:
Statutory rate 21.0  %
Income subject to tonnage tax 12.1  %
U.S. federal income tax statutory changes 161.7  %
Non-deductible expenses (1.9) %
Foreign earnings not subject to U.S. income tax (13.7) %
Foreign taxes not creditable against U.S. income tax 5.8  %
Subpart F income (2.7) %
State taxes (0.7) %
Share award plans (2.1) %
179.5  %
On March 27, 2020, the U.S. Congress passed and the President signed the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") into law to address the economic fallout of the 2020 coronavirus pandemic. One provision of the CARES Act increases the tax deduction for net operating losses from 80% to 100% for 2018 through 2020, allows net operating losses generated in 2018 through 2020 to be carried back up to five years and increases the deductible interest expense limit from 30% to 50% of taxable EBITDA. As a result of these statutory changes, during the three months ended March 31, 2020, the Company determined it will be able to carry its 2019 net operating losses back to tax years when the statutory tax rate was 35% resulting in an income tax benefit of $12.7 million, which is included in income tax expense (benefit) in the accompanying condensed consolidated statements of income. As of March 31, 2020, $37.4 million of income tax receivables is included in other receivables in the accompanying condensed consolidated balance sheets.