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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes |
1 5. | Income Taxes
The components of loss before provision for income taxes for the periods presented are as follows (in thousands):
|  | Year Ended December 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Domestic |  | $ | (207,314 | ) |  | $ | (146,227 | ) |  | $ | (68,606 | )
Foreign |  |  | 16 |  |  |  | — |  |  |  | — |
Total loss before provision for income taxes |  | $ | (207,298 | ) |  | $ | (146,227 | ) |  | $ | (68,606 | )
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The significant components of our deferred tax assets and liabilities as of the dates presented are as follows (in thousands):
|  | December 31, |
|  | 2021 |  |  | 2020 |
Deferred tax assets |  |  |  |  |  |  |  |
Net operating losses |  | $ | 200,363 |  |  | $ | 105,433 |
Tax credit carryforward |  |  | 31,200 |  |  |  | 18,981 |
Nonqualifying stock options |  |  | 18,072 |  |  |  | 12,096 |
Deferred rent |  |  | — |  |  |  | — |
Operating lease liabilities |  |  | 30,401 |  |  |  | 31,052 |
Deferred revenue |  |  | 42,481 |  |  |  | 59,713 |
Other |  |  | 4,345 |  |  |  | 2,983 |
Total deferred tax assets |  |  | 326,862 |  |  |  | 230,258 |
Less: Valuation allowance |  |  | (297,020 | ) |  |  | (197,527 | )
Deferred tax assets, net of valuation allowance |  |  | 29,842 |  |  |  | 32,731 |
Deferred tax liabilities |  |  |  |  |  |  |  |
Tangible and intangible assets |  |  | (7,310 | ) |  |  | (5,760 | )
ROU assets |  |  | (22,532 | ) |  |  | (26,971 | )
Net deferred taxes |  | $ | — |  |  | $ | — |
ASC Topic 740, Income Taxes, requires that the tax benefit of NOLs, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is “more likely than not.” Realization of the future tax benefits is dependent on our ability to generate sufficient taxable income within the carryforward period. Because of our history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a valuation allowance. The valuation allowance increased by $99.5 million and $96.6 million during the year ended December 31, 2021 and 2020, respectively. Federal tax laws impose substantial restrictions on the utilization of NOL and credit carryforwards in the event of an ownership change, as defined in Section 382 of the Internal Revenue Code of 1986. Accordingly, our ability to utilize these carryforwards may be limited due to such ownership changes. We have completed a Section 382 analysis for changes in ownership through December 31, 2020 and continue to monitor for changes that could trigger a limitation. Based on this analysis, we do not expect to have any permanent limitations on the utilization of our federal NOLs. Under the TCJA federal income tax law, federal NOLs incurred in 2018 and future years may be carried forward indefinitely, but the deductibility of such federal NOLs is subject to an annual limitation. NOLs generated prior to 2018 are eligible to be carried forward up to 20 years. As of December 31, 2021, we had U.S. federal NOLs of $192.5 million and U.S. federal tax credits of $33.6 million that will begin to expire in 2028. We also had $576.2 million of NOLs as of December 31, 2021 that do not expire. The effective tax rate of our provision for income taxes differs from the federal statutory rate for the periods presented as follows:
|  | Year Ended December 31,
|  | 2021 |  | 2020 |  | 2019
Statutory rate |  | 21.0% |  | 21.0% |  | 21.0%
State tax, net of federal tax benefit |  | 8.3 |  | 13.8 |  | 8.1
Stock compensation |  | 14.1 |  | 25.2 |  | 9.8
Permanent items |  | (0.1) |  | (0.1) |  | (1.0)
Credits |  | 4.7 |  | 5.7 |  | 6.1
Other |  | (0.3) |  | 0.5 |  | 0.3
Change in valuation allowance |  | (47.7) |  | (66.1) |  | (44.3)
Total |  | 0.0% |  | 0.0% |  | 0.0%
We account for Global Intangible Low-Taxed Income as period costs when incurred. We recognize, in our consolidated financial statements, the effect of a tax position when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. We had unrecognized tax benefits of $6.9 million as of December 31, 2021. A reconciliation of the beginning and ending amounts of unrecognized tax benefits for the dates presented are as follows (in thousands):
Balance at December 31, 2018 |  | $ | 1,260 |
Additions in 2019 |  |  | 792 |
Balance at December 31, 2019 |  |  | 2,052 |
Additions in 2020 |  |  | 1,437 |
Balance at December 31, 2020 |  |  | 3,489 |
Additions in 2021 |  |  | 3,426 |
Balance at December 31, 2021 |  | $ | 6,915 |
During the year ended December 31, 2021, 2020 and 2019, we recognized uncertain tax positions of $3.4 million, $1.4 million and $0.8 million, respectively, related to a reduction of the research and development credit deferred tax asset. Unrecognized tax benefits may change during the next twelve months for items that arise in the ordinary course of business. We do not expect a material change to our unrecognized tax benefits over the next twelve months that would have an adverse effect on our operating results. We recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. We had no accrued interest or penalties related to uncertain tax positions as of December 31, 2021 and 2020. We file federal and certain state income tax returns, which provide varying statutes of limitations on assessments. However, because of NOL carryforwards, substantially all tax years since inception remain open to federal and state tax 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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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