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Income Taxes and Deferred Tax Asset/Liability | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income Taxes and Deferred Tax Asset/Liability | Income Taxes and Deferred Tax Asset/Liability The Company and its subsidiaries file U.S. federal and various U.S. state income tax returns. Current income tax expense (or benefit) represents federal and state taxes based on tax paid or expected to be payable or receivable for the periods shown in the consolidated statements of operations. Current income tax expense represents federal and state income tax paid or expected to be payable for the years shown in the consolidated statements of operations. The income tax expense in the accompanying consolidated financial statements consists of the following (amounts in thousands):
| Years Ended December 31,
| 2017 |  | 2016 |  | 2015
Current tax expense | $ | 118 |  |  | $ | 88 |  |  | $ | 7 |
Deferred tax expense | — |  |  | — |  |  | — |
Total tax expense | $ | 118 |  |  | $ | 88 |  |  | $ | 7 |
The income tax provision differs from the amount using the statutory federal income tax rate of 35% for the following reasons (amounts in thousands):
| Years Ended December 31,
| 2017 |  | 2016 |  | 2015
| Amount |  | % |  | Amount |  | % |  | Amount |  | %
Tax expense (benefit) at the U.S. federal statutory rate | $ | 5,577 |  |  | 35.0 | % |  | $ | (2,563 | ) |  | 35.0 | % |  | $ | (6,013 | ) |  | 35.0 | %
State tax based on income, net of refunds and federal benefits | (264 | ) |  | (1.7 | ) |  | (113 | ) |  | 1.5 |  |  | (860 | ) |  | 5.0 |
Taxes on subsidiaries’ and joint ventures’ earnings allocated to noncontrolling interests owners | (5,504 | ) |  | (34.5 | ) |  | (3,786 | ) |  | 51.7 |  |  | (2,620 | ) |  | 15.3 |
Valuation allowance | (18,006 | ) |  | (113.0 | ) |  | 6,919 |  |  | (94.5 | ) |  | 10,036 |  |  | (58.4 | )
Tax credits | (349 | ) |  | (2.2 | ) |  | (1,258 | ) |  | 17.2 |  |  | (551 | ) |  | 3.2 |
Tax rate change | 19,545 |  |  | 122.7 |  |  | — |  |  | — |  |  | — |  |  | — |
Return to provision | (62 | ) |  | (0.4 | ) |  | 400 |  |  | (5.5 | ) |  | — |  |  | — |
Earn-out liability | 460 |  |  | 2.9 |  |  | 433 |  |  | (5.9 | ) |  | — |  |  | — |
Equity compensation | (1,371 | ) |  | (8.6 | ) |  | — |  |  | — |  |  | — |  |  | — |
Other permanent differences | 92 |  |  | 0.6 |  |  | 56 |  |  | (0.8 | ) |  | 15 |  |  | (0.1 | )
Income tax expense | $ | 118 |  |  | 0.8 | % |  | $ | 88 |  |  | (1.3 | )% |  | $ | 7 |  |  | — | %
The effective income tax rate varied from the statutory rate primarily as a result of the change in the federal tax rate under the new Tax Act offset by a change in the valuation allowance, net income attributable to noncontrolling interest owners, which is taxable to those owners rather than to the Company, and equity compensation. Deferred tax assets and liabilities consist of the following (amounts in thousands):
| Long Term
| As of December 31,
| 2017 |  | 2016
Assets related to: |  |  |
Accrued compensation and other | $ | 3,417 |  |  | $ | 4,490 |
Goodwill | 1,133 |  |  | 3,909 |
Noncontrolling interests | 1,648 |  |  | 2,085 |
Deferred revenue | 312 |  |  | 482 |
Revaluation of put/call liabilities | 11,269 |  |  | 16,620 |
Net operating loss carryforwards | 26,015 |  |  | 41,942 |
Total deferred tax assets | 43,794 |  |  | 69,528 |
Valuation allowance for deferred tax assets | (36,545 | ) |  | (58,034 | )
Net deferred tax assets | $ | 7,249 |  |  | $ | 11,494 |
Liabilities related to: |  |  |
Depreciation of property and equipment | (6,661 | ) |  | (11,471 | )
Other | (588 | ) |  | (23 | )
Net deferred tax liabilities | $ | (7,249 | ) |  | $ | (11,494 | )
Net total deferred tax assets | $ | — |  |  | $ | — |
We have federal and state net operating loss ("NOL") carryforwards of $109.5 million and $57.7 million, respectively, which will expire at various dates in the next 20 years for U.S. federal income tax and in the next 5 to 20 years for the various state jurisdictions where we operate. Such NOL carryforwards expire beginning in 2020 through 2037. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "Tax Act"). The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, (1) reducing the U.S. federal corporate tax rate from 35 percent to 21 percent; (2) eliminating the corporate alternative minimum tax (AMT) and changing how existing AMT credits can be realized; (3) creating a new limitation on deductible interest expense; and (4) changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017; (5) expanding the limitation for executive compensation deductions; and (6) implementing 100% immediate expensing of qualified property. As a result of the reduced federal corporate tax rate under the Tax Act, the Company has reduced the value of its net deferred tax assets $19.5 million to reflect the enacted rate. This reduction was entirely offset with a corresponding reduction of our valuation allowance which resulted in no charge to the tax provision for the year. The Tax Act also provides that existing AMT credit carryforwards are refundable beginning in 2018. The Company has approximately $146 thousand of AMT credit carryforwards that are expected to be fully refunded by 2022. Therefore, we have recorded a tax benefit and receivable for these credits in our December 31, 2017 financial statements. The Tax Act expands the prior rules applicable to deductible executive compensation. These changes do not apply to compensation stemming from contracts entered into on or before November 2, 2017, unless such contracts were materially modified on or after that date. Due to the uncertainty of he application of the new rules, we are still completing our technical analysis with respect to this provision of the Tax Act. The accounting is expected to be completed when our 2017 U.S. corporate income tax return is filed by the fourth quarter of 2018. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. This assessment includes any impact from the newly enacted Tax Act. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2017. The cumulative three-year period loss that remained at December 31, 2017 was the result of write-downs recorded during the past three years. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future growth. On the basis of this evaluation, as of December 31, 2017, the Company continued to maintain a full valuation allowance of $36.5 million on the net deferred tax assets including federal and state net operating losses as they are not likely to be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted in the future if objective negative evidence or cumulative losses are no longer present and additional weight may be given to subjective evidence such as our projections for growth. If our assumptions change and we determine we will be able to realize these deferred tax assets, the tax benefits relating to any reversal of the valuation allowance on deferred tax assets as of December 31, 2017, will be accounted for as follows: approximately $30.4 million will be recognized as a reduction of income tax expense and $6.1 million will be recorded as an increase in equity. As a result of the Company’s analysis, management has determined that the Company does not have any material uncertain tax positions. The Company’s policy is to recognize interest related to any underpayment of taxes as interest expense and penalties as administrative expenses. No interest or penalties have been accrued at December 31, 2017, 2016 or 2015. The Company’s U.S. federal income tax returns for 2014 and later years are open and subject to examination by the I.R.S. In addition, the Company’s state income tax returns for 2013 and later years are open and subject to examination.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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