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3/25/22, 9:42 AM Table of Contents road -20210930 Differences exist between income and expenses reported on the consolidated financial statements and those deducted for U.S. federal and state income tax reporting. The Company's deferred tax assets and liabilities consisted of the following temporary difference tax effects at September 30, 2021, 2020 and 2019 (in thousands): Deferred tax assets Allowance for bad debt Amortization of fmite-lived intangible assets State net operating loss Employee benefits Accrued insurance claims Other Total deferred tax assets Deferred tax liabilities Amortization of goodwill Property, plant and equipment Other Total deferred tax liabilities, Net deferred tax liabilities September 30, 2021 2020 413 $ 527 586 405 488 664 736 37 1,610 1,583 335 556 4,168 3,772 (6,541) (14,530) (459) (21,530) $ (17,362) (5,048) (12,341) (17,389) $ (13,617) The Consolidated Balance Sheets at September 30, 2021 and 2020 include gross deferred tax assets of $4.2 million and $3.8 million, respectively. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which those temporary differences are deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryforward periods), projected taxable income, and tax -planning strategies in making this assessment. Based on the weight of all evidence known and available as of the balance sheet date, management believes that these tax benefits are more likely than not to be realized in the future. To the extent that management does not consider it more likely than not that a deferred tax asset will be recovered, a valuation allowance is established. Income taxes payable have been reduced by fuel tax credits of $0.3 million for each of the fiscal years ended September 30, 2021 and 2020. The remaining amount of goodwill expected to be deductible for tax purposes was $68.5 million and $22.6 million at September 30, 2021 and 2020, respectively. The following is a reconciliation of net deferred tax assets (liabilities) to amounts reflected on the Company's Consolidated Balance Sheets at September 30, 2021 and 2020 (in thousands): September 30, 2021 2020 Asset: Deferred income taxes, net $ — $ 386 Liability: Deferred income taxes, net (17,362) (14,003) Net deferred tax assets (liabilities) $ (17,362) $ (13,617) At September 30, 2021 and 2020, the Company had state net operating loss carryforwards of $15.2 million and $15.3 million, respectively. The state net operating loss credit carryforwards expire in varying amounts between the fiscal years ended September 30 2032 and 2036. https://www.sec.gov/Archivesiedgarldata/0001718227/000171822721000107/road-202l0930.htm 1151144