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Income Taxes | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | Note 7. Income Taxes The components of the provision for income tax expense (benefit) are as follows (in thousands):
|  | December 31, 2019 |
|  | Current |  |  | Deferred |  |  | Total |
U.S. federal |  | $ | 8,446 |  |  | $ | (700 | ) |  | $ | 7,746 |
State and local |  |  | 4,218 |  |  |  | (913 | ) |  |  | 3,305 |
Foreign |  |  | 449 |  |  |  | — |  |  |  | 449 |
|  | $ | 13,113 |  |  | $ | (1,613 | ) |  | $ | 11,500 |
|  | December 31, 2018 |
|  | Current |  |  | Deferred |  |  | Total |
U.S. federal |  | $ | 9,877 |  |  | $ | (2,847 | ) |  | $ | 7,030 |
State and local |  |  | 3,867 |  |  |  | (921 | ) |  |  | 2,946 |
Foreign |  |  | 553 |  |  |  | — |  |  |  | 553 |
|  | $ | 14,297 |  |  | $ | (3,768 | ) |  | $ | 10,529 |
|  | December 31, 2017 |
|  | Current |  |  | Deferred |  |  | Total |
U.S. federal |  | $ | 8,656 |  |  | $ | 3,763 |  |  | $ | 12,419 |
State and local |  |  | 1,808 |  |  |  | (136 | ) |  |  | 1,672 |
|  | $ | 10,464 |  |  | $ | 3,627 |  |  | $ | 14,091 |
The components of net deferred tax assets (liabilities) are as follows (in thousands):
|  | December 31, |
|  | 2019 |  |  | 2018 |
Deferred tax assets: |  |  |  |  |  |  |  |
Accrued liabilities, reserves and other |  | $ | 11,152 |  |  | $ | 9,283 |
UNICAP |  |  | 3,310 |  |  |  | 3,071 |
Tax basis goodwill |  |  | 2,121 |  |  |  | 2,398 |
Investment in FORWARD |  |  | 2,753 |  |  |  | 2,402 |
Equity-based compensation |  |  | 1,371 |  |  |  | 855 |
Deferred revenue |  |  | 1,229 |  |  |  | — |
Net operating loss |  |  | 786 |  |  |  | 1,291 |
Gross deferred tax assets |  |  | 22,722 |  |  |  | 19,300 |
Valuation allowance |  |  | (786 | ) |  |  | (1,291 | )
Deferred tax assets, net of valuation allowance |  |  | 21,936 |  |  |  | 18,009 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Accrued expenses and reserves |  |  | (4,364 | ) |  |  | (3,723 | )
State taxes |  |  | (53 | ) |  |  | 48 |
Depreciation |  |  | (2,146 | ) |  |  | (487 | )
Intangible assets |  |  | (83 | ) |  |  | (170 | )
Total gross deferred liabilities |  |  | (6,646 | ) |  |  | (4,332 | )
Net deferred tax assets |  | $ | 15,290 |  |  | $ | 13,677 |
As of December 31, 2019 and 2018, we had gross federal and state operating loss carryforwards of $5.4 million and $9.3 million, respectively. If not utilized, these losses will begin to expire in 2034. For the years ended December 31, 2019 and 2018, we recorded a full valuation allowance of $0.8 million and $1.3 million, respectively, on the net operating loss carryforwards deferred tax asset, as management concluded that it is more-likely than-not that the asset will not be realized. Our effective tax rate was different than the statutory U.S. federal income tax rate for the following reasons:
|  | December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
Computed “expected” tax expense |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 35.0 | %
Deferred rate adjustment |  |  | — |  |  |  | — |  |  |  | 27.0 |
Valuation allowance |  |  | (1.1 | ) |  |  | 0.2 |  |  |  | 6.1 |
State and local income taxes, net of federal tax benefit |  |  | 5.8 |  |  |  | 5.7 |  |  |  | 4.7 |
Foreign-derived intangible income |  |  | (1.3 | ) |  |  | (1.6 | ) |  |  | — |
Permanent items |  |  | 1.2 |  |  |  | 1.3 |  |  |  | 0.3 |
Equity-based compensation |  |  | (1.2 | ) |  |  | — |  |  |  | — |
Other |  |  | — |  |  |  | (1.0 | ) |  |  | 0.7 |
|  |  | 24.4 | % |  |  | 25.6 | % |  |  | 73.8 | %
On December 22, 2017, the U.S. Tax Cuts and Jobs Act, or the Tax Reform Act, was signed into law. The Tax Reform Act significantly revised the U.S. corporate income tax law by, among other things, lowering the U.S. corporate tax rate from 35% to 21%, effective January 1, 2018 and repealing the Alternative Minimum Tax. ASC, 740 requires that the impact of tax legislation be recognized in the period in which the law was enacted. We recorded tax expense of $5.1 million due to the remeasurement of deferred tax assets and liabilities in the year ended December 31, 2017 as a result of the Tax Reform Act. For the year ended December 31, 2017, Twist Holdings, LLC and Advance Holdings, LLC filed separate consolidated federal and state income tax returns. For the years ended December 31, 2019 and 2018, we filed a consolidated federal and state income tax return for Revolve Group, Inc. We believe that there are no uncertain tax positions that would impact the accompanying consolidated financial statements. We do not anticipate there will be a material change in our recognition of uncertain tax positions in the next 12 months. The tax years ended December 31, 2016 through 2019 remain subject to possible examination by the Internal Revenue Service and possible examination by state tax jurisdictions. No interest or penalties related to income taxes are recognized in the accompanying consolidated financial statements.

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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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