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Income Tax | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Tax | INCOME TAX The Income tax provision (benefit) on income from operations consists of the following:
| Years Ended December 31,
| 2018 |  | 2017 |  | 2016
|  |  | As Adjusted |  | As Adjusted
Current: |  |  |  |  |
Federal | $ | 9,110 |  |  | $ | 22,883 |  |  | $ | 41,366 |
State | 4,367 |  |  | 4,666 |  |  | 7,023 |
| 13,477 |  |  | 27,549 |  |  | 48,389 |
Deferred | (5,069 | ) |  | (33,664 | ) |  | (26,432 | )
| $ | 8,408 |  |  | $ | (6,115 | ) |  | $ | 21,957 |
Reconciliation of the U.S. statutory income tax rate to our effective income tax expense rate for operations follows:
| Years Ended December 31,
| 2018 |  | 2017 |  | 2016
|  |  | As Adjusted |  | As Adjusted
Federal income tax expense at statutory rate | $ | 32,733 |  |  | $ | 57,209 |  |  | $ | 47,480 |
State income tax, net of federal income tax benefit | 7,953 |  |  | 4,754 |  |  | 5,091 |
Domestic production activities deduction | — |  |  | (2,617 | ) |  | (3,947 | )
Excess tax benefits related to stock option exercises | (32,487 | ) |  | (40,624 | ) |  | (29,582 | )
Tax Act adjustments | (1,750 | ) |  | (25,992 | ) |  | — |
Tax credits | (3,715 | ) |  | (3,578 | ) |  | — |
Non-deductible business expenses | 5,655 |  |  | 4,573 |  |  | 2,979 |
Other, net | 19 |  |  | 160 |  |  | (64 | )
| $ | 8,408 |  |  | $ | (6,115 | ) |  | $ | 21,957 |
On December 22, 2017, the Tax Act was enacted into law. The Tax Act amends the Internal Revenue Code to reduce tax rates and modify policies, credits and deductions for individuals and businesses. For businesses, the Tax Act reduces the U.S. corporate federal tax rate from a maximum of 35% to a flat 21% rate and transitions from a worldwide tax system to a territorial tax system. The Tax Act also adds many new provisions including changes to bonus depreciation, the deduction for executive compensation and a tax on global intangible low-taxed income (GILTI). The most significant impact of the Tax Act to us is the reduction in the U.S. federal corporate income tax rate from 35% to 21%. The impact of the rate reduction on our 2017 income tax provision was a $26.0 million (as adjusted) tax benefit due to the remeasurement of deferred tax assets and liabilities. We recorded an additional $1.8 million tax benefit in 2018 after our 2017 tax returns were finalized. The accounting for the income tax effects of the Tax Act was completed during the fourth quarter of 2018. Overall, the changes due to the Tax Act will favorably affect income tax expense and future U.S. earnings. The tax effects of the major items recorded as deferred tax assets and liabilities as of December 31 are:
| 2018 |  | 2017
|  |  | As Adjusted
Deferred income tax assets: |  |  |
Operating expenses not currently deductible | $ | 8,989 |  |  | $ | 9,714 |
Stock option and other employee benefit plans | 19,496 |  |  | 15,932 |
Loss and credit carryforwards | 17,999 |  |  | — |
Total deferred income tax assets | 46,484 |  |  | 25,646 |
Valuation allowance | (1,049 | ) |  | — |
Total deferred income tax assets, net of valuation allowance | 45,435 |  |  | 25,646 |
Deferred income tax liabilities: |  |  |
Intangible assets | (70,752 | ) |  | (60,189 | )
Property and equipment | (8,455 | ) |  | (5,699 | )
Prepaid expenses | (4,079 | ) |  | (190 | )
Deferred revenue | (3,940 | ) |  | (6,447 | )
Total deferred income tax liabilities | (87,226 | ) |  | (72,525 | )
Net deferred income tax liabilities | $ | (41,791 | ) |  | $ | (46,879 | )
The above 2017 balances reflect an $8.0 million deferred tax liability related to the recognition of revenue as part of the adoption of ASU No. 2014-09. During 2018, we acquired federal and state net operating loss and tax credit carryforwards totaling $18.0 million in connection with the acquisition of Socrata. The federal and state net operating loss and tax credit carryforwards will expire in various years beginning in 2027, if not utilized. The acquired net operating loss and tax credit carryforwards are subject to an annual limitation but are expected to be realized with the exception of certain state net operating loss carryforwards. The valuation allowance disclosed in the table above relates to state net operating losses not likely to be realized. We believe it is more likely than not that all other deferred tax assets will be realized. However, the amount of the deferred tax asset considered realizable could be adjusted in the future if estimates of reversing taxable temporary differences are revised. In connection with the acquisition of Socrata in 2018, we recorded a $1.9 million liability for an uncertain tax position associated with acquired tax credit carryforwards. The unrecognized tax benefits are included in deferred income taxes in our consolidated balance sheets and are reflected in the opening balance sheet of Socrata. The entire amount, if recognized, would affect the effective tax rate. The aggregate changes in the balance of unrecognized tax benefits were as follows:
| 2018
Balance at beginning of year | $ | — |
Increases for tax positions related to prior years | 1,929 |
Balance at end of year | $ | 1,929 |
Based on the information currently available, we do not anticipate a significant increase or decrease to our tax contingencies for these issues for the next 12 months. We are subject to U.S. federal tax, as well as income tax of multiple state, local and foreign jurisdictions. We are routinely subject to income tax examinations by these taxing jurisdictions, but we do not have a history of, nor do we expect any material adjustments as a result of these examinations. During 2017, the Internal Revenue Service issued a “no change” letter upon completion of their examination of our 2012 tax year. With few exceptions, major U.S. federal, state, local and foreign jurisdictions are no longer subject to examination for years before 2014. As of February 20, 2019, no significant adjustments have been proposed by any taxing jurisdiction. We paid income taxes, net of refunds received, of $6.8 million in 2018, $36.0 million in 2017, and $30.2 million in 2016.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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