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Income Taxes | 12 Months Ended
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Dec. 31, 2013
Income Taxes |
15. | Income Taxes
Consolidated income (loss) before provision for income taxes consisted of the following (in thousands):
|  | Year Ended December 31, |
|  | 2013 |  |  | 2012 |  |  | 2011 |
U.S. |  | $ | (67,004 | ) |  | $ | (70,792 | ) |  | $ | (49,990 | )
Non U.S. |  |  | 284 |  |  |  | 843 |  |  |  | 1,393 |
Total |  | $ | (66,720 | ) |  | $ | (69,949 | ) |  | $ | (48,597 | )
No income tax expense was recorded for the years ended December 31, 2013, 2012 and 2011 due to net operating loss carryforwards to offset the net income at Dynavax Europe and a valuation allowance which offsets the deferred tax assets. The difference between the consolidated income tax benefit and the amount computed by applying the federal statutory income tax rate to the consolidated loss before income taxes was as follows (in thousands):
|  | Year Ended December 31, |
|  | 2013 |  |  | 2012 |  |  | 2011 |
Income tax benefit at federal statutory rate |  | $ | (22,678 | ) |  | $ | (23,650 | ) |  | $ | (16,523 | )
State tax |  |  | (178 | ) |  |  | (89 | ) |  |  | (2,586 | )
Business credits |  |  | (2,515 | ) |  |  | - |  |  |  | (1,394 | )
Deferred compensation charges |  |  | 3,072 |  |  |  | 1,002 |  |  |  | 595 |
Change in valuation allowance |  |  | 22,354 |  |  |  | 21,966 |  |  |  | 18,099 |
Change in foreign tax rates |  |  | - |  |  |  | - |  |  |  | (34 | )
Change in the fair value measurements |  |  | - |  |  |  | - |  |  |  | 286 |
Non-deductible debt discount |  |  | - |  |  |  | - |  |  |  | 509 |
Deemed dividend |  |  | - |  |  |  | - |  |  |  | 273 |
Prior year true up |  |  | - |  |  |  | - |  |  |  | - |
Other |  |  | (55 | ) |  |  | 771 |  |  |  | 775 |
Total income tax expense |  | $ | - |  |  | $ | - |  |  | $ | - |
Deferred tax assets and liabilities as of December 31, 2013 and 2012 consisted of the following (in thousands):
|  | December 31, |
|  | 2013 |  |  | 2012 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carry forwards |  | $ | 147,655 |  |  | $ | 127,529 |
Research tax credit carry forwards |  |  | 21,336 |  |  |  | 18,163 |
Accruals and reserves |  |  | 9,501 |  |  |  | 8,529 |
Capitalized research costs |  |  | 10,662 |  |  |  | 12,757 |
Deferred revenue |  |  | 2,486 |  |  |  | 2,180 |
Other |  |  | 1,222 |  |  |  | 1,221 |
|  |  | 192,862 |  |  |  | 170,379 |
Less valuation allowance |  |  | (192,733 | ) |  |  | (170,232 | )
Total deferred tax assets |  |  | 129 |  |  |  | 147 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Fixed Assets |  |  | (162 | ) |  |  | (86 | )
Other |  |  | 33 |  |  |  | (61 | )
Total deferred tax liabilities |  |  | (129 | ) |  |  | (147 | )
Net deferred tax assets |  | $ | - |  |  | $ | - |
The tax benefit of net operating losses, temporary differences and credit carryforwards is required to 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 recent 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 full valuation allowance. The valuation allowance increased by $22.5 million, $22.0 million and $18.1 million during the years ended December 31, 2013, 2012 and 2011, respectively. The amount of the valuation allowance for deferred tax assets associated with excess tax deductions from stock based compensation arrangements that will be allocated to contributed capital if the future tax benefits are subsequently recognized is $0.3 million. We have not recorded deferred income taxes applicable to undistributed earnings of a foreign subsidiary that are indefinitely reinvested in foreign operations. Generally, such earnings become subject to U.S. tax upon the remittance of dividends and under certain other circumstances. It is not practicable to estimate the amount of the deferred tax liability on such undistributed earnings. As of December 31, 2013, we had federal net operating loss carryforwards of approximately $384.1 million, which will expire in the years 2018 through 2037 and federal research and development tax credits of approximately $13.8 million, which expire in the years 2018 through 2033. As of December 31, 2013, we had potential net operating loss carryforwards for California state income tax purposes of approximately $219.7 million, which expire in the years 2013 through 2033, and California state research and development tax credits of approximately $11.5 million which do not expire. As of December 31, 2013, we had net operating loss carryforwards for foreign income tax purposes of approximately $27.8 million, which do not expire. The Tax Reform Act of 1986 limits the annual use of net operating loss and tax credit carryforwards in certain situations where changes occur in stock ownership of a company. In the event the Company has a change in ownership, as defined, the annual utilization of such carryforwards could be limited. Due to past equity issuances and changes in ownership of Dynavax common stock, we believe that our ability to use some of our net operating losses and tax credits in the future may be limited.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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