Haverty Furniture sees one-time charge of $3.5M-$4M from Tax Act
On December 22, 2017, the President signed into law Public Law No. 115-97, commonly referred to as the Tax Cuts and Jobs Act. The Tax Act contains significant changes to corporate taxes, including a permanent reduction of the corporate tax rate from 35% to 21% effective January 1, 2018. The reduction in the corporate rate will require a one-time revaluation of certain tax-related assets. Based on preliminary estimates, it is currently expected the revaluation will result in a one-time tax charge of $3.5M-$4M, which will be recorded as additional income tax expense in Havertys' consolidated statement of comprehensive income for the fourth quarter of 2017. This estimated range is based upon a review and analysis of the net deferred tax assets at September 30, 2017, and expected adjustments in the fourth quarter. Havertys actual write-down may vary from this range as it is dependent on the final net deferred tax assets as of December 31, 2017. Havertys anticipates subsequent regulations and interpretations to be released associated with the Tax Act that will provide additional guidance on its application; however, we currently estimate that Havertys effective tax rate for 2018 will be in the range of 24% to 26%.