Q16-5 Temporary differences result in future taxable or deductible amounts when the related asset or liability is recovered Q16-6 Q16-7 or settled. Some differences, though, are not temporary. What events create permanent differences? What effect do these have on the determination of income taxes payable? Of deferred income taxes? Of tax expense? Identify three examples of differences with no deferred tax consequences. The income tax rate for Hudson Refinery has been 35% for each of its 12 years of operation. Company forecasters expect a much-debated tax reform bill to be passed by Congress early next year. The new tax measum would increase Hudson's tax rate to 42%. When measuring this year's deferred tax liability, which rate should Hudson use? woad from 35% to 21% How would this affect am