
	Year ended March 31,
	2021		2020		2019
Current:
U.S. Federal	$	(28,060)	$	(33,715)	$	(39,534)
Non-U.S.	17		146		323
State	(1,071)		171		(16,092)
	(29,114)		(33,398)		(55,303)
Deferred:
U.S. Federal	(1,205)		(5,103)		1,245
Non-U.S.	(44)		(1,006)		149
State	(169)		(769)		8,500
	(1,418)		(6,878)		9,894
Total	$	(30,532)	$	(40,276)	$	(45,409)

Loss before income taxes, as shown above, is based on the location of the entity to which such losses are attributable. However, since such losses may be subject to taxation in more than one country, the income tax provision shown above as U.S. or non-U.S. may not correspond to the loss shown above.

Below is a reconciliation of expected income tax benefit computed by applying the U.S. federal statutory rate of 21.0% for fiscal years 2021, 2020 and 2019 to loss before income taxes to actual income tax benefit from continuing operations (dollars in thousands):


	Year ended March 31,
	2021		2020		2019
Computed expected income tax benefit	$	(25,368)	$	(34,763)	$	(37,665)
Increase (reduction) in income taxes resulting from:
State income taxes, net of federal benefit	(979)		(473)		(5,998)
Research and other tax credits	(4,635)		(1,517)		(3,141)

Nondeductible expenses	1,104		838		426

Stock-based compensation	(2,024)		5,025		(5,350)
Non-U.S. subsidiaries taxed at other rates	194		230		1,343
Adjustment to valuation allowances	2,230		(2,245)		5,204
Net operating loss carryback taxed at other rates	—		(7,360)		—

Other, net	(1,054)		(11)		(228)
	$	(30,532)	$	(40,276)	$	(45,409)

On March 27, 2020, the U.S. enacted The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The CARES Act included several significant changes and clarifications to existing tax law, including changes to the treatment of net operating losses (“NOLs”). Under the CARES Act, NOLs arising in tax years beginning after December 31, 2017, and before January 1, 2021 may be carried back to each of the five tax years preceding the tax year of the loss. As such, the Company plans to carry back its fiscal 2021 NOL, resulting in an expected refund of approximately $28 million. The Company was also able to carry back its fiscal 2020 NOL, resulting in an expected refund of approximately $33 million, also in fiscal 2022.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at March 31, 2021 and 2020 are presented below (dollars in thousands).


	2021		2020
Deferred tax assets:
Accrued expenses	$	3,501	$	3,978
Deferred revenue	11		16
Lease liabilities	3,324		4,939
Net operating loss carryforwards	35,945		33,516
Stock-based compensation	2,991		8,076
Nonqualified deferred compensation	2,802		2,815

Tax credit carryforwards	7,818		1,240
Other	2,856		2,778
Total deferred tax assets	59,248		57,358
Less valuation allowance	(35,332)		(32,971)
Net deferred tax assets	23,916		24,387
Deferred tax liabilities:
Prepaid expenses	(6,734)		(2,239)

Property and equipment	(248)		(1,742)
Right-of-use assets	(3,016)		(4,147)
Intangible assets	(8,409)		(9,605)
Deferred commissions	(5,391)		(3,817)
Accrued expenses	—		(2,189)
Total deferred tax liabilities	(23,798)		(23,739)
Net deferred tax assets	$	118	$	648

At March 31, 2021, the Company has net operating loss carryforwards of approximately $34.3 million and $126.2 million for U.S. federal and state income tax purposes, respectively. Of the net operating loss carryforwards, $24.0 million and $18.9 million will not expire for federal and state purposes, respectively. The remaining carryforwards will expire in various amounts and will completely expire if not used by 2041. The Company has foreign net operating loss carryforwards of approximately $101.0 million. Of this amount, $90.2 million do not have expiration dates. The remainder expires in various amounts and will completely expire if not used by 2031. The Company has federal and state credit carryforwards of $5.4 million and $5.8 million, respectively. Of the state credit carryforwards, $5.2 million will not expire. The remaining credit carryforwards will expire in various amounts and will completely expire if not used by 2041.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Realization of the Company’s net deferred tax assets is dependent upon its generation of sufficient taxable income of the proper character in future years in appropriate tax jurisdictions to obtain benefit from the reversal of temporary differences and the use of net operating loss and credit carryforwards.

Based upon the weight of available evidence, including the Company’s history of losses from continuing operations, management believes that it is not more likely than not the Company will realize the benefits of the deductible temporary differences and net operating loss and credit carryforwards. Accordingly, the Company has established valuation allowances against its deferred tax assets.

Based upon the Company's history of losses in certain non-U.S. jurisdictions, the Company has not recorded a benefit for current foreign losses in these jurisdictions. In addition, management believes it is not more than likely than not the Company will realize the benefits of certain foreign net operating loss carryforwards and has established valuation allowances in the amount of $26.0 million against deferred tax assets in such jurisdictions. No valuation allowance has been established against deferred tax assets in non-U.S. jurisdictions in which historical profits and forecasted continuing profits exist.


	Year ended March 31,
	2021		2020		2019
Balance at beginning of period	$	23,400	$	19,600	$	15,415
Increases related to prior year tax positions	—		2,458		325
Decreases related to prior year tax positions	(139)		(1,048)		(292)
Increases related to current year tax positions	1,765		2,433		5,483

Lapse of statute of limitations	—		(43)		(1,331)
Balance at end of period	$	25,026	$	23,400	$	19,600

Gross unrecognized tax benefits as of March 31, 2021 was $25.0 million, of which $22.6 million would reduce the Company’s effective tax rate in future periods if and when realized. The Company reports accrued interest and penalties related to unrecognized tax benefits in income tax expense. The combined amount of accrued interest and penalties related to tax positions on tax returns was approximately $3.5 million as of March 31, 2021. Accrued interest and penalties increased by $1.0 million during fiscal 2021. The Company does not anticipate a reduction of unrecognized tax benefits within the next 12 months.

The Company files a consolidated U.S. federal income tax return and tax returns in various state and local jurisdictions. The Company’s subsidiaries also file tax returns in various foreign jurisdictions in which they operate. In the U.S., the statute of limitations for Internal Revenue Service examinations remains open for the Company’s federal income tax returns for fiscal years after 2013. The status of U.S. federal, state and foreign tax examinations varies by jurisdiction. The Company does not anticipate any material adjustments to its financial statements resulting from tax examinations currently in progress.