This excerpt taken from the ARII 10-K filed Feb 13, 2007.
Income tax expense
Income tax expense for 2005 was $9.4 million, or 38.8% of our earnings before income taxes, as compared to $2.2 million for 2004, or 53.3% of our earnings before income taxes. Our effective tax rate is impacted by expenses included in pre-tax earnings for which we do not receive a deduction for tax purposes. These expenses result from the liabilities and obligations retained by ACF as part of its transfer of assets to us in 1994. Although ACF is responsible for any costs associated with these liabilities, we are required to recognize these costs as expenses in order to reflect the full cost of doing business. The entire amount of such permanently nondeductible expenses is treated as contribution of capital resulting in an increase to our effective tax rate. These expenses in pre-tax income were $1.4 million and $1.1 million for 2004 and 2005, respectively.