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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The following is a geographical breakdown of income (loss) before the provision for income taxes:
| Year Ended December 31,
| 2021 |  | 2020 |  | 2019
| (In thousands)
Domestic | $ | 67,103 |  |  | $ | 34,714 |  |  | $ | 81,641 |
Foreign | (1,096) |  |  | (5,365) |  |  | (7,708) |
Income (loss) before provision for income taxes | $ | 66,007 |  |  | $ | 29,349 |  |  | $ | 73,933 |
The provision for (benefit from) income taxes consisted of the following:
| Year Ended December 31,
| 2021 |  | 2020 |  | 2019
| (In thousands)
Current: |  |  |  |  |
Federal | $ | (7,841) |  |  | $ | 1,874 |  |  | $ | 8,006 |
State | 187 |  |  | 1,733 |  |  | 4,549 |
Foreign | (234) |  |  | 647 |  |  | 1,240 |
Total current income taxes | (7,888) |  |  | 4,254 |  |  | 13,795 |
Deferred: |  |  |  |  |
Federal | (2,708) |  |  | (3,868) |  |  | (1,292) |
State | (1,217) |  |  | (2,494) |  |  | (1,609) |
Foreign | (29) |  |  | (737) |  |  | 1,701 |
Total deferred income taxes | (3,954) |  |  | (7,099) |  |  | (1,200) |
Total provision for (benefit from) income taxes | $ | (11,842) |  |  | $ | (2,845) |  |  | $ | 12,595 |
The provision for (benefit from) income taxes differs from the amount computed by applying the statutory federal tax rate as follows:
| Year Ended December 31,
| 2021 |  | 2020 |  | 2019
| (In thousands)
U.S. federal tax provision at statutory rate | $ | 13,861 |  |  | $ | 6,163 |  |  | $ | 15,525 |
State taxes | (814) |  |  | (601) |  |  | 2,258 |
Section 162(m) limitation | 6,382 |  |  | 2,550 |  |  | 2,279 |
Non-deductible expenses | 363 |  |  | 325 |  |  | 619 |
Uncertain tax positions | (835) |  |  | (394) |  |  | (2,472) |
Share-based compensation tax benefit | (20,717) |  |  | (6,929) |  |  | (7,892) |
Research tax credits | (5,170) |  |  | (4,038) |  |  | (3,805) |
Restructuring impact | (6,116) |  |  | — |  |  | 7,432 |
Foreign derived intangible income deduction | (68) |  |  | (204) |  |  | (449) |
Foreign rate differential | 17 |  |  | (102) |  |  | (1,424) |
Transaction cost | 1,097 |  |  | 422 |  |  | — |
Other | 158 |  |  | (37) |  |  | 524 |
Total provision for (benefit from) income taxes | $ | (11,842) |  |  | $ | (2,845) |  |  | $ | 12,595 |
The Company has executed various global operational centralization activities and legal entity rationalization in recent years. During the year ended December 31, 2021, the Company recognized a benefit on the release of previously recorded uncertain tax positions related to the sale of certain intellectual property rights by Aesynt B.V. to Omnicell, Inc. and a gain on the transfer of certain assets to Omnicell Pty Ltd, which resulted in a tax benefit, net of tax expense, of $6.1 million. During the year ended December 31, 2020, Aesynt B.V. merged with and into Aesynt Holding B.V., with Aesynt Holding B.V. surviving and changing its name to Omnicell B.V., Aesynt Holding Coöperatief U.A. liquidated into Omnicell, Inc., and Omnicell GmbH merged with and into Mach4 Automatisierungstechnik GmbH (“Mach4”), with Mach4 surviving and changing its name to Omnicell GmbH. During the year ended December 31, 2020, the Company also recognized a gain on Omnicell Limited’s transferring shares of Omnicell GmbH to Omnicell International, LLC, which resulted in an immaterial tax expense. During the year ended December 31, 2019, the Company recognized gain on the sale of certain intellectual property rights by Aesynt B.V. to Omnicell, Inc. and by Mach4 to Omnicell, Inc., which resulted in a tax expense, net of tax benefit, of $7.4 million. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was signed into law in response to the COVID-19 pandemic. The CARES Act, among other provisions, includes provisions related to refundable payroll tax credits, deferment of the employer portion of certain payroll taxes, net operating losses carryback periods, alternative minimum tax credit refunds, modification to the net interest expense deduction limitation, and technical amendments to tax depreciation methods for qualified improvement property placed in service after December 31, 2017. The provisions of the CARES Act did not have a material impact on the Company’s income taxes. On March 11, 2021, the President of the United States signed into law the “American Rescue Plan Act of 2021” (the “ARP Act”), which provides additional economic stimulus and tax credits, including the expansion and modification of the employee retention tax credit enacted by the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) and the refundable tax credits for COVID-related paid sick and family leave enacted by the Family First Act. The Company does not expect these provisions of the ARP Act to have a material impact for income taxes. The ARP Act further expands the “covered employees” definition for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended, used in determining the limitation on the deduction for excessive employee remuneration rules to be applicable for taxable years beginning after December 31, 2026. The provisions of the ARP Act did not have a material impact on the Company’s income taxes. Significant components of the Company’s deferred tax assets (liabilities) were as follows:
| December 31,
| 2021 |  | 2020
| (In thousands)
Deferred tax assets (liabilities): |  |  |
Deferred revenues | $ | 6,892 |  |  | $ | 5,910 |
Share-based compensation | 9,265 |  |  | 8,094 |
Inventory-related items | 4,834 |  |  | 4,953 |
Tax credit carryforwards | 15,311 |  |  | 12,105 |
Reserves and accruals | 8,699 |  |  | 8,160 |
Loss carryforwards | 14,451 |  |  | 8,461 |
Lease liability | 13,179 |  |  | 15,465 |
Other, net | 1,824 |  |  | 1,578 |
Gross deferred tax assets | 74,455 |  |  | 64,726 |
Valuation allowance | — |  |  | (1,199) |
Total net deferred tax assets | 74,455 |  |  | 63,527 |
Intangibles | (41,158) |  |  | (22,010) |
Depreciation and amortization | (38,924) |  |  | (36,528) |
Prepaid expenses | (17,775) |  |  | (15,654) |
Right-of-use assets | (12,039) |  |  | (13,949) |
Other, net | (381) |  |  | — |
Total deferred tax liabilities | (110,277) |  |  | (88,141) |
Net deferred tax liabilities | $ | (35,822) |  |  | $ | (24,614) |
Deferred income tax assets (liabilities) are provided for temporary differences that will result in future tax deductions or future taxable income, as well as the future benefit of tax credit carryforwards. The Company recognizes deferred tax assets to the extent that it believes these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing temporary differences, projected future taxable income, tax planning strategies, and results of recent operations. On the basis of this evaluation, as of December 31, 2021, previously recorded valuation allowance of $1.2 million for certain foreign net operating loss carryforwards was released, and the Company no longer has a valuation allowance against any of its deferred tax assets. As of December 31, 2021, the Company had $30.5 million of federal net operating losses and $18.0 million of state net operating loss carryforwards expiring at various dates beginning in 2024, and $23.5 million of foreign net operating losses carried forward indefinitely. For income tax purposes, the Company has federal and California research tax credits carryforwards of $5.3 million and $19.0 million, respectively. Federal research tax credit carryforwards will begin to expire in 2040. California credits are available indefinitely to reduce cash taxes payable. It is the Company’s practice and intention to reinvest the earnings of its non-U.S. subsidiaries in those operations. As of December 31, 2021, the Company has not made a provision for U.S. federal income, withholding, and state income taxes on the outside basis difference related to certain foreign subsidiaries because earnings are intended to be indefinitely reinvested in operations outside the U.S. The Company files income tax returns in the United States and various state and foreign jurisdictions. In the normal course of business, the Company is subject to examinations by taxing authorities, including major jurisdictions such as the United States, Germany, Italy, Netherlands, and the United Kingdom. With few exceptions, as of December 31, 2021, the Company was no longer subject to U.S., state, and foreign examination for years before 2018, 2017, and 2017, respectively. The aggregate change in the balance of gross unrecognized tax benefits, which excludes interest and penalties, for the years ended December 31, 2021, 2020, and 2019:
| (In thousands)
Balance as of December 31, 2018 | $ | 9,961 |
Increases related to tax positions taken during a prior period | 10 |
Decreases related to tax positions taken during the prior period | (6) |
Increases related to tax positions taken during the current period | 9,282 |
Decreases related to settlements | — |
Decreases related to expiration of statute of limitations | (2,472) |
Balance as of December 31, 2019 | 16,775 |
Increases related to tax positions taken during a prior period | 88 |
Decreases related to tax positions taken during the prior period | — |
Increases related to tax positions taken during the current period | 2,294 |
Decreases related to settlements | — |
Decreases related to expiration of statute of limitations | (911) |
Balance as of December 31, 2020 | 18,246 |
Increases related to tax positions taken during a prior period | 40 |
Decreases related to tax positions taken during the prior period | (8,908) |
Increases related to tax positions taken during the current period | 1,219 |
Decreases related to settlements | — |
Decreases related to expiration of statute of limitations | (1,636) |
Balance as of December 31, 2021 | $ | 8,961 |
The total amounts of gross unrecognized tax benefit that, if realized, would favorably affect the Company’s effective income tax rate in future periods, was $9.0 million and $18.2 million as of December 31, 2021 and 2020, respectively. The decrease in the gross uncertain tax benefits during the year ended December 31, 2021 was primarily due to a release of certain unrecognized tax benefits as a result of an effective settlement with the tax authorities. The Company recognizes interest and penalties related to uncertain tax positions in interest and other income (expense), net in the Consolidated Statements of Operations, accruing $0.3 million, $0.4 million, and $0.5 million for the years ended December 31, 2021, 2020, and 2019, respectively. Accrued interest and penalties are included within other long-term liabilities on the Consolidated Balance Sheets. The combined amount of cumulative accrued interest and penalties was approximately $0.6 million, $1.4 million, and $1.0 million for the years ended December 31, 2021, 2020, and 2019, respectively. The Company does not believe there will be any significant changes in its unrecognized tax positions over the next twelve months.

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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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