Annual report pursuant to Section 13 and 15(d)

Income Taxes

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Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes We are subject to U.S. federal income tax as well as income tax in multiple state and local jurisdictions. We have concluded all U.S. federal income tax matters as well as material state and local tax matters for years through 2016.
We file consolidated federal income tax returns that include all of our U.S. subsidiaries. The components of the provision for income taxes from continuing operations for the years ended December 31, 2021, 2020 and 2019 are as follows (in thousands):
  2021 2020 2019
Current:
Federal $ 3,919  $ 4,086  $ 7,739 
State 856  1,262  1,344 
Foreign 1,066  144  825 
  5,841  5,492  9,908 
Deferred:      
Federal (3,318) (78) (66)
State (1,038) 163  (490)
Foreign —  21  51 
  (4,356) 106  (505)
Provision for income taxes $ 1,485  $ 5,598  $ 9,403 

The differences between the amount of tax computed at the federal statutory rate of 21% in 2021, 2020 and 2019, and the provision for income taxes from continuing operations for the years ended December 31, 2021, 2020 and 2019 are as follows (in thousands):
  2021 2020 2019
Tax at statutory federal income tax rate $ 1,985  $ 89  $ 9,749 
Increases (decreases) in tax resulting from:      
State taxes, net of federal tax benefit 383  (52) 1,805 
Permanent differences, net (839) (1,406) (195)
Tax credits (434) (195) (612)
Prior year true-up adjustment 83  397  (1,274)
Valuation allowance 331  6,716  (137)
Other provision adjustments (24) 49  67 
Provision for income taxes $ 1,485  $ 5,598  $ 9,403 
Certain amounts from prior years have been reclassified to conform to the current year presentation.
The tax effect of temporary differences representing deferred tax assets and liabilities as of December 31, 2021 and 2020 are as follows (in thousands):
  2021 2020
Gross deferred tax assets
Deferred compensation and accrued paid leave $ 5,422  $ 6,302 
Inventory reserve 12,465  432 
Operating lease liabilities 7,805  6,984 
Stock-based compensation 775  605 
Interest rate swaps 58  400 
Reserve for contract disallowance 114  195 
Capitalized inventory 900  573 
US operating and capital loss carryforward 6,045  5,989 
Tax credit carryforward 1,411  1,412 
Foreign country operating loss carryforward 892  583 
35,887  23,475 
Valuation allowance(a)
(8,257) (7,926)
  Total gross deferred tax assets 27,630  15,549 
Gross deferred tax liabilities
Depreciation (3,895) (3,061)
Deferred revenues (1,358) (1,816)
Goodwill and intangible assets (24,836) (19,470)
Operating lease right-of-use assets (6,375) (5,384)
Other (274) (715)
Total gross deferred tax liabilities (36,738) (30,446)
Net deferred tax liabilities $ (9,108) $ (14,897)
(a) A valuation allowance was provided against US capital loss in connection with the stock sale of Prime Turbines, certain state net operating loss, tax credit, and foreign tax loss deferred tax assets arising from carryforwards of unused tax benefits.
(b) Certain amounts from prior year have been reclassified to conform with current year presentation.

We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. With few exceptions, the statute of limitations for these jurisdictions is no longer open for audit or examinations for the years before 2017.
As of December 31, 2021, we have various tax losses and tax credits that may be applied against future taxable income. The majority of such tax attributes will expire in 2026 through 2034; however, some may be carried forward indefinitely.