9. Income Taxes

The effective tax rate differs from the statutory tax rate as follows:



	Three months ended				Nine months ended
	September 30,				September 30,
	2018		2017		2018		2017
Statutory U.S. federal income tax rate	21.0	%	35.0	%	21.0	%	35.0	%
State income tax, net of related federal income tax benefit	6.2		4.5		6.2		4.5
Foreign operations	0.9		1.0		0.9		1.0
Federal credits	(1.7)		(0.9)		(1.7)		(0.9)
Executive compensation disallowed	2.1		0.1		2.1		0.1
Meals and entertainment	1.6		-		1.6		-
Other	(1.6)		(0.9)		0.4		(1.2)
Equity compensation related adjustments	8.3		0.2		5.3		(0.3)
Effective income tax rate	36.8	%	39.0	%	35.8	%	38.2	%

The 2017 Tax Cuts and Jobs Act (the “TCJA”) lowered the U.S. corporate income tax rate from 35% to 21% for tax years beginning after December 31, 2017. The reduction was offset by an increase in the effective state tax rate due to the impact of state tax deductions at the lower federal tax rate, and the impact of non-deductible items that were added or expanded by the TCJA including impacts of executive stock-based compensation, and non-deductible meals. The tax rate was further impacted during the three and nine months ended September 30, 2018, due to a one-time tax expense on expired vested options offset by favorable federal tax credits.

In 2017, we recorded a tax benefit of $6,047, which we believed was the impact of the enactment of the TCJA. The benefit was based on currently available information and interpretations, which are continuing to evolve, and as a result, the benefit is considered provisional. We continue to update our analysis related to the TCJA as supplemental legislation, regulatory guidance, or evolving technical interpretations become available. Based on supplemental legislation issued during 2018, we recorded additional tax expense of $0 and $399 during the three and nine months ended September 30, 2018, respectively. We will continue to refine such amounts within the measurement period as provided by Staff Accounting Bulletin Number 118. We expect to complete our analysis no later than the fourth quarter of 2018.