In response to the COVID-19 Pandemic, many governments implemented measures to provide aid and economic stimulus in the form of tax incentives. On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The CARES Act includes several significant business tax provisions as well as relief for individual taxpayers. The CARES Act modified the tax rules related to net operating loss ("NOL") uses. In the fourth quarter of fiscal 2020, we recorded a current tax benefit of approximately $10.0 million which represented our estimate of the net operating loss carryback resulting from the CARES Act. In the first quarter of fiscal 2021, we recorded an adjustment of $3.2 million to reduce the current benefit of the net operating loss carryback benefit we realized from the CARES Act.

The Tax Cuts and Jobs Act (the "Act") was enacted on December 22, 2017. The Act reduces the US federal corporate tax rate from 35% to 21%, required companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and created new taxes on certain foreign sourced earnings. The most significant impact of the legislation for the Company was the reduction of the value of the Company's net deferred tax assets (which represent future tax benefits) as a result of lowering the U.S. corporate income tax rate from 35% to 21%. The Act also included a requirement to pay a one-time transition tax on the cumulative value of earnings and profits that were previously not repatriated for U.S. income tax purposes. We have concluded that the one-time transition tax is zero. In addition, we no longer consider the undistributed earnings held outside of the U.S. by most of its foreign subsidiaries to be indefinitely reinvested.

The Act subjects a U.S. shareholder to tax on Global Intangible Low-Taxed Income ("GILTI") earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740, No. 5, Accounting for GILTI, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. Because the Company was evaluating the provisions of GILTI as of the fiscal year ended March 31, 2018, it recorded no GILTI-related deferred amounts in the financial statements for the year ended March 31, 2018. After further consideration, the Company has elected to account for GILTI in the year the tax is incurred, and has recorded an estimate of GILTI as a component of the projected tax provision for the fiscal years ending March 31, 2021, 2020 and 2019.

Net deferred tax assets arise due to the recognition of income and expense items for tax purposes, which differ from those used for financial statement purposes. ASC 740, Income Taxes, provides for the recognition of deferred tax assets if realization of such assets is more likely than not. In assessing the need for a valuation allowance, we considered all available objective and verifiable evidence both positive and negative, including historical levels of pre-tax income (loss) both on a consolidated basis and tax reporting entity basis, legislative developments, expectations and risks associated with estimates of future pre-tax income, and prudent and feasible tax planning strategies. As a result of this analysis, we determined that it is more likely than not that we will not realize the benefits of our gross deferred tax assets and therefore have recorded a valuation allowance to reduce the carrying value of these gross deferred tax assets, net of the impact of the reversal of taxable temporary differences.


	Year Ended March 31,
	2021		2020		2019
Current:
Federal	$	3,399	$	(10,071)	$	(1,772)
State	196		(613)		103
Foreign	6,215		5,566		8,371
Deferred:
Federal	(113)		284		144
State	—		—		—
Foreign	22		(2,067)		20
	$	9,719	$	(6,901)	$	6,866


	Year Ended March 31,
	2021		2020		2019
Statutory federal income tax expense (benefit) rate	(21.0)	%	(21.0)	%	21.0	%
State and local income tax expense, net of federal income tax effect	0.9	%	(4.9)	%	1.0	%
Foreign earnings taxed at different rates	10.0	%	12.3	%	25.5	%
U.S. tax on Global Intangible Low-Taxed Income	1.8	%	14.5	%	72.9	%
Domestic permanent differences including acquisition items	1.7	%	7.7	%	7.8	%
Foreign tax credits	(7.8)	%	(19.3)	%	(22.4)	%
Research credits	(68.6)	%	(32.9)	%	(51.8)	%
Tax reserves	(0.1)	%	(0.6)	%	(5.2)	%
Valuation allowance	74.4	%	64.0	%	(76.7)	%
Enacted tax law changes	—	%	10.6	%	(7.8)	%
Stock-based compensation	36.3	%	(43.1)	%	97.2	%
CARES Act Impact	15.0	%	(82.1)	%	—	%
Reduction of NOL for carryback	—	%	59.2	%	—	%
Other differences, net	3.2	%	(19.4)	%	4.3	%
Effective income tax expense (benefit)	45.8	%	(55.0)	%	65.8	%


	March 31,
	2021		2020
Deferred tax assets:
Net operating losses	$	12,586	$	16,075
Equity investment	1,193		1,192
Stock-based compensation	16,280		20,792
Deferred revenue	14,879		16,027
Tax credits	39,062		24,936
Accrued expenses	3,568		4,675
Allowance for doubtful accounts and other reserves	801		546
Less: valuation allowance	(78,339)		(61,702)
Total deferred tax assets	10,030		22,541
Deferred tax liabilities:
Depreciation and amortization	(4,553)		(16,349)
Deferred commissions and other	(6,238)		(7,041)
Total deferred tax liabilities	$	(10,791)	$	(23,390)
Net deferred tax liability	$	(761)	$	(849)

During fiscal 2019, the Company could no longer assert that it had the intent to indefinitely reinvest the earnings and profits of the foreign subsidiaries, with the exception of India. Accordingly, the Company was required to adjust its deferred tax liability for the effects of this change in assertion. This effect was not significant. Our position during fiscal 2021 remains unchanged.

At March 31, 2021, we had NOL carry forwards of $47,976. There are $22,061 NOLs that will expire between 2034 and 2036 and $25,915 NOLs that will not expire. As of March 31, 2021, we had deferred tax assets related to state NOL carry forwards of $1,779 which expire over various years beginning in 2030 depending on the jurisdiction.

We also had federal and state research tax credits ("R&D credit") carryforwards of approximately $27,828 and $13,743, respectively. The federal R&D credit carryforwards expire from 2034 through 2041, and the state R&D credit carryforwards expire from 2022 through 2036.

We conduct business globally and as a result, file income tax returns in the United States and in various state and foreign jurisdictions. In the normal course of business, we are subject to examination by taxing authorities throughout the world. The following table summarizes the tax years subject to income tax examinations by tax authorities as of March 31, 2021. The years subject to income tax examination in our foreign jurisdictions cover the maximum time period with respect to these jurisdictions. Due to NOLs, in some cases the tax years continue to remain subject to examination with respect to such NOLs.

The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations in each of our tax jurisdictions. The number of years with open tax audits varies depending on the tax jurisdiction. A number of years may lapse before a particular matter is audited and finally resolved. A reconciliation of the amounts of unrecognized tax benefits is as follows:


Balance at March 31, 2018	$	1,740
Additions for tax positions related to fiscal 2019	—
Additions for tax positions related to prior years	547
Settlements and effective settlements with tax authorities and remeasurements	—
Reductions related to the expiration of statutes of limitations	(695)
Foreign currency translation adjustment	—
Balance at March 31, 2019	1,592
Additions for tax positions related to fiscal 2020	170
Additions for tax positions related to prior years	—
Settlements and effective settlements with tax authorities and remeasurements	—
Reductions related to the expiration of statutes of limitations	(100)
Foreign currency translation adjustment	—
Balance at March 31, 2020	1,662
Additions for tax positions related to fiscal 2021	614
Additions for tax positions related to prior years	—
Settlements and effective settlements with tax authorities and remeasurements	—
Reductions related to the expiration of statutes of limitations	(65)
Foreign currency translation adjustment	—
Balance at March 31, 2021	2,211

We estimate that no significant remaining unrecognized tax benefits will be realized during the fiscal year ending March 31, 2022. Interest and penalties related to unrecognized tax benefits are recorded in Income tax expense. In the years ended March 31, 2021, 2020 and 2019, we recognized $9, $6 and $40, respectively, of net interest and penalties in the Consolidated Statements of Operations.