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Income Taxes
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9 Months Ended |
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Sep. 30, 2014
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| Income Tax Disclosure [Abstract] | |
| Income Taxes |
Income Taxes
The Company files a consolidated federal income tax return and certain combined state and local income tax returns together with its subsidiaries.
A net deferred tax liability of approximately $14,922 was recorded in connection with the acquisition of Highland for the excess financial statement basis over tax basis of the acquired assets and assumed liabilities (See Note 2). As Highland will be included in the Company’s consolidated federal and certain combined state and local income tax returns, deferred federal and a portion of deferred state and local tax liabilities assumed in the acquisition may be used to offset the reversal of the Company’s pre-existing deferred tax assets. Accordingly, the Company’s deferred tax valuation allowance has been reduced by $14,125 of the deferred tax liability recorded in the acquisition and recorded as a deferred tax benefit in the accompanying statements of operations for the three and nine-month periods ended September 30, 2014.
Income tax benefit and income tax expense includes the tax effect of goodwill, which is amortized for income tax purposes, of $294 and $298 for the three months ended September 30, 2014 and 2013, respectively, and $881 and $885 for the nine months ended September 30, 2014 and 2013, respectively.
The effective tax rates differ from the statutory income tax rates for the 2014 and 2013 periods, primarily due to the reduction of the deferred tax valuation allowance, a tax provision related to amortization of goodwill for tax purposes and utilization of net operating loss carryforwards for which valuation allowances had previously been provided.
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