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Income taxes | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income taxes | Income taxes The components of income before provision for income taxes are as follows (in thousands):
| Year ended December 31,
| 2018 |  | 2017 |  | 2016
Domestic | $ | 17,405 |  |  | $ | 22,409 |  |  | $ | 9,677 |
Foreign | 551 |  |  | 60 |  |  | 135 |
Total | $ | 17,956 |  |  | $ | 22,469 |  |  | $ | 9,812 |
The components of the benefit (provision) for income taxes are as follows (in thousands):
| Year ended December 31,
| 2018 |  | 2017 |  | 2016
Current: |  |  |  |  |  |  |
U.S. federal | $ | (2,414 | ) |  | $ | (2,058 | ) |  | $ | (9,978 | )
State | (948 | ) |  | (369 | ) |  | (2,096 | )
Foreign | (8 | ) |  | — |  |  | — |
Total current | (3,370 | ) |  | (2,427 | ) |  | (12,074 | )
Deferred: |  |  |  |  |  |  |
U.S. federal | 1,005 |  |  | 13,246 |  |  | 8,384 |
State | 101 |  |  | (21 | ) |  | (773 | )
Foreign | (167 | ) |  | 208 |  |  | (36 | )
Total deferred | 939 |  |  | 13,433 |  |  | 7,575 |
Total (provision) benefit for income taxes | $ | (2,431 | ) |  | $ | 11,006 |  |  | $ | (4,499 | )
Effective January 1, 2018, the federal statutory rate decreased from 35% to 21% as a result of the enactment of the Tax Cuts and Jobs Act (the “2017 Tax Act”). The following table presents a reconciliation of the federal statutory rate to the Company’s effective tax rate:
| Year ended December 31,
| 2018 |  | 2017 |  | 2016
Federal statutory rate | 21.0 | % |  | 35.0 | % |  | 35.0 | %
Federal tax deferred rate change | — | % |  | (53.8 | )% |  | — | %
State tax, net of federal benefit | 2.6 | % |  | 0.6 | % |  | 0.7 | %
State tax deferred rate change, net of federal benefit | 0.9 | % |  | 0.9 | % |  | 18.7 | %
Nondeductible business expenses | 1.4 | % |  | — | % |  | 2.0 | %
Provision-to-return adjustment | (3.9 | )% |  | — | % |  | — | %
Uncertain tax positions | (1.3 | )% |  | (1.7 | )% |  | 2.0 | %
Stock based compensation | (8.6 | )% |  | (28.1 | )% |  | (16.8 | )%
Others | 1.4 | % |  | (1.9 | )% |  | 4.3 | %
Effective tax rate | 13.5 | % |  | (49.0 | )% |  | 45.9 | %
The components of net deferred taxes arising from temporary differences are as follows (in thousands):
| December 31, 2018 |  | December 31, 2017
Deferred tax assets: |  |  |
Compensation | $ | 928 |  |  | $ | 1,056 |
Inventories and receivables | 3,008 |  |  | 2,965 |
Accrued expenses | 424 |  |  | 663 |
Stock compensation | 5,175 |  |  | 3,497 |
Net operating losses | 43 |  |  | 210 |
Other | 898 |  |  | 925 |
Deferred tax assets | 10,476 |  |  | 9,316 |
Deferred tax liabilities: |  |  |
Goodwill | 2,618 |  |  | 2,214 |
Fixed assets | 2,405 |  |  | 1,923 |
Intangible assets | 24,591 |  |  | 25,962 |
Other | 1,023 |  |  | 313 |
Deferred tax liabilities | 30,637 |  |  | 30,412 |
Net deferred tax liabilities | $ | 20,161 |  |  | $ | 21,096 |
The deferred tax assets and liabilities are reported in the accompanying balance sheets as follows (in thousands):
| December 31, 2018 |  | December 31, 2017
Deferred tax assets | $ | 56 |  |  | $ | 245 |
Deferred tax liabilities | 20,217 |  |  | 21,341 |
Net deferred tax liabilities | $ | 20,161 |  |  | $ | 21,096 |
At December 31, 2018, the Company had gross state net operating loss carryforwards of $0.6 million. The state net operating loss carryforwards will begin to expire in 2036 and have a carryforward period of 20 years. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
| Year ended December 31,
| 2018 |  | 2017 |  | 2016
Balance at beginning of year | $ | 764 |  |  | $ | 1,208 |  |  | $ | 1,256 |
Increases for prior year tax positions | — |  |  | 63 |  |  | 438 |
Increases for current year tax positions | 173 |  |  | 68 |  |  | 103 |
Decreases for prior year tax positions | (8 | ) |  | (1 | ) |  | (589 | )
Decreases due to settlements | — |  |  | (32 | ) |  | — |
Decreases due to statutes lapsing | (358 | ) |  | (542 | ) |  | — |
Balance at end of year | $ | 571 |  |  | $ | 764 |  |  | $ | 1,208 |
If all of the Company’s unrecognized tax benefits as of December 31, 2018 and December 31, 2017 were recognized, $0.4 million and $0.3 million of unrecognized tax benefits, respectively, would impact the effective tax rate. The Company believes it is reasonably possible that $0.2 million of unrecognized tax benefits may reverse in the next twelve months. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in the provision for income taxes. The Company had $0.1 million of accrued gross interest and penalties as of December 31, 2018 and 2017, respectively. The Company recognized net interest expense of $(40,000), $17,000 and $0.1 million for the years ended December 31, 2018, 2017 and 2016, respectively. The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. As of December 31, 2018, with few exceptions, the Company or its subsidiaries are no longer subject to examination prior to tax year 2015. Certain state returns are currently under audit by the state tax authorities. The Company does not expect the results of these audits to have a material impact on the consolidated financial statements. On December 22, 2017, the 2017 Tax Act was signed into law, which made significant changes to the Internal Revenue Code of 1986, as amended. One such change introduced the Global Intangible Low-Taxed Income (“GILTI”) provision, which is first effective for the period ending December 31, 2018. Under U.S. GAAP, the Company is permitted to make an accounting policy election to either treat taxes due on inclusions in U.S. taxable income related to GILTI as a current-period expense when incurred or to include such amounts in the Company's measurement of its deferred taxes. The Company has chosen to treat GILTI as a current-period expense when incurred.

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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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