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

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

The consolidated provision for income taxes is as follows:

Consolidated deferred tax assets and liabilities consist of the following:


	As of December 31,
	2021			2022
	(Dollars in thousands)
Deferred tax assets:
Financial statement accruals not currently deductible	$	2,738		$	1,977
Allowance for bad debt reserve		3,399			2,075
Net operating loss, AMT credit and other carryforwards		35,290			35,846
State taxes		216			60
Operating lease liabilities		13,596			13,224
Other		3,965			5,869

Total deferred tax assets		59,204			59,051
Valuation allowance for deferred tax assets		(39,135	)		(39,950	)

Net deferred tax assets	$	20,069		$	19,101


Deferred tax liabilities:
Excess of net book value of property and equipment and software for financial reporting purposes over tax basis	$	145		$	13
Excess of net book value of intangible assets for financial reporting purposes over tax basis		75,747			74,524
Operating lease right-of-use assets		11,189			11,296

Total deferred tax liabilities		87,081			85,833

Net deferred tax liabilities	$	(67,012	)	$	(66,732	)

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


	As of December 31,
	2021			2022
	(Dollars in thousands)
Deferred income tax asset per balance sheet	$	—		$	—
Deferred income tax liability per balance sheet		(67,012	)		(66,732	)

	$	(67,012	)	$	(66,732	)

A reconciliation of the statutory federal income tax rate to the benefit from income tax is as follows:


	Year Ended December 31,
	2021			2022
	(Dollars in thousands)
Statutory federal income tax (statutory tax rate)	$	8,559		$	(762	)
Effect of state taxes, net of federal		643			892
Permanent items		172			217
PPP loan forgiveness		(2,351	)		—
State rate change		531			(1,064	)
Valuation allowance		(8,903	)		(626	)
Stock based compensation cancellation		181			38
Other, net		409			913

Benefit from income taxes	$	(759	)	$	(392	)