Silvercrest Asset Management Group LLC Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Income Taxes

Income Taxes

12 Months Ended

Dec. 31, 2019

14. INCOME TAXES

	Year Ended December 31,
	2019		2018		2017
Current Provision:
Federal	$	1,225	$	1,835	$	2,492
State and local		2,378		3,053		2,596
Total Current Provision		3,603		4,888		5,088
Deferred Provision:
Federal		1,014		465		8,062
State and local		561		105		584
Total Deferred Provision		1,575		570		8,646
Total Provision for Income Taxes	$	5,178	$	5,458	$	13,734

Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their bases for income tax purposes.

As of December 31, 2019 and 2018, the Company had a net deferred tax asset of $13,103 and $12,093, respectively.

A summary of deferred tax assets and liabilities as follows:

	As of December 31,
	2019		2018
Deferred tax assets
Intangible assets	$	14,064	$	12,886
Deferred leases		1,206		—
Other		—		133
Total deferred tax assets	$	15,270	$	13,019
Deferred tax liabilities
Intangible assets	$	245	$	246
Right of use assets		1,014		—
Investment on underlying SLP partnership		874		680
Other		34		—
Total deferred tax liabilities	$	2,167	$	926
Net deferred tax assets (liabilities)	$	13,103	$	12,093

The following table reconciles the provision for income taxes to the U.S. Federal statutory tax rate:

	Year Ended December 31,
	2019			2018			2017
Statutory U.S. federal income tax rate		21.00	%		21.00	%		35.00	%
Income passed through to Partners		(7.78	)%		(8.29	)%		(11.38	)%
State and local income taxes		12.01	%		11.73	%		8.14	%
Permanent items		(0.44	)%		(0.16	)%		(6.70	)%
Discrete expenses due to Corporate Tax Reform		—	%		(0.40	)%		27.69	%
Other		0.36	%		0.03	%		(0.46	)%
Effective income tax rate		25.15	%		23.91	%		52.29	%

As of December 31, 2019, the Company had net tax receivables of $1,265 which consisted of net federal and state and local tax receivables of $939 and $326, respectively. As of December 31, 2018, the Company had net tax receivables of $445 which consisted of net federal and state and local tax receivables of $423 and $22, respectively.

Of the total net deferred taxes at December 31, 2019 and 2018, $31 and $43, respectively, of the net deferred tax liabilities relate to non-controlling interests. These amounts are included in deferred tax and other liabilities on the Consolidated Statement of Financial Position, respectively.

In the normal course of business, the Company is subject to examination by federal, state, and local tax regulators. As of December 31, 2019, the Company’s U.S. federal income tax returns for the years 2016 through 2019 are open under the normal three-year statute of limitations and therefore subject to examination.

The guidance for accounting for uncertainty in income taxes prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company does not believe that it has any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months. Furthermore, the Company does not have any material uncertain tax positions at December 31, 2019 and 2018.