Salem Media Group, Inc. Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

The consolidated provision for income taxes is as follows:

Consolidated deferred tax assets and liabilities consist of the following:


	As of December 31,
	2018			2019
	(Dollars in thousands)
Deferred tax assets:
Financial statement accruals not currently deductible	$	6,822		$	4,652
Net operating loss, AMT credit and other carryforwards		50,067			45,521
State taxes		124			70
Operating lease liabilities under ASC 842		—			16,618
Other		3,969			6,847

Total deferred tax assets		60,982			73,708
Valuation allowance for deferred tax assets		(5,371	)		(12,977	)

Net deferred tax assets	$	55,611		$	60,731

Deferred tax liabilities:
Excess of net book value of property and equipment and software for financial reporting purposes over tax basis	$	2,763		$	2,391
Excess of net book value of intangible assets for financial reporting purposes over tax basis		88,112			82,939
Operating lease right-of-use assets under ASC 842		—			14,179
Other		8			—

Total deferred tax liabilities		90,883			99,509

Net deferred tax liabilitie s	$	(35,272	)	$	(38,778	)

The following table reconciles the above net deferred tax liabilities to the financial statements:


	As of December 31,
	2018			2019
	(Dollars in thousands)
Deferred income tax asset per balance sheet	$	—		$	—
Deferred income tax liability per balance sheet		(35,272	)		(38,778	)

	$	(35,272	)	$	(38,778	)

A reconciliation of the statutory federal income tax rate to the provision for income tax is as follows:


	Year Ended December 31,
	2018			2019
	(Dollars in thousands)
Statutory federal income tax (statutory tax rate)	$	(151	)	$	(5,045	)
Effect of state taxes, net of federal		2,284			3,714
Permanent items		318			329
State rate change		248			668
Valuation allowance		(147	)		4,105
Tax Cuts and Jobs Act of 2017		—			—
Other, net		(79	)		206

Provision for income taxes	$	2,473		$	3,977