Provision for Income Tax
|9 Months Ended|
Sep. 30, 2021
|Income Tax Disclosure [Abstract]|
|Provision for Income Tax||
NOTE 17 – Provision for Income Tax
The income tax provision for the three-and-nine months ended September 30, 2021 and 2020 is as follows:
The Company recognized federal, and state income tax expense of $0 million and $0 million during the three and nine months ended September 30, 2021, respectively, compared to $0 million during the same periods in 2020. The effective tax rates for the three-and-nine months ended September 30, 2021 were 0% and 0%, respectively, and were 0% during the same periods in 2020. The difference between the Company’s effective tax rate for the period ended September 30, 2021 and the U.S. statutory tax rate of 21% was primarily due to a full valuation allowance recorded on the Company’s net U.S. deferred tax assets. The Company did not record a tax provision for the three-or-nine months ended September 30, 2020 primarily due to Archaea Energy LLC and Aria Energy LLC’s status as a pass-through entity for U.S. federal income tax purposes. The Company evaluates the realizability of the deferred tax assets on a quarterly basis and establishes a valuation allowance when it is more likely than not that all or a portion of a deferred tax asset may not be realized.
No uncertain tax benefits have been recorded in 2021.
On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law. The CARES Act includes provisions relating to refundable payroll tax credits, deferment of the employer portion of certain payroll taxes, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. The Company analyzed the provisions of the CARES Act and determined there was no significant impact to its income tax for the nine months ended September 30, 2021. Future regulatory guidance under the CARES Act or additional legislation enacted by Congress could impact our tax provision in future periods.
Additionally, the CARES Act is an economic emergency aid package to help mitigate the impact of the COVID-19 pandemic. The Company implemented certain provisions of the CARES Act, specifically securing loans under the Paycheck Protection Program. Under the CARES Act, all provisions of the loans have been forgiven as of September 30, 2021.
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef