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Income Taxes | 9 Months Ended
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Sep. 30, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income tax expense for the nine months ended September 30, 2018 and 2017 differs from the amount computed by applying the statutory federal income tax rate to income before income taxes. The sources and tax effects of the differences are as follows:
| Nine Months Ended September 30,
| 2018 |  | 2017
U.S. federal statutory tax rate | 21.0 | % |  | 35.0 | %
State income taxes, net of federal tax benefit | (0.1 | ) |  | (0.5 | )
General business credits | (1.4 | ) |  | (3.0 | )
Employee stock-based compensation | (16.1 | ) |  | (8.2 | )
IRC 162(m) limitation | 2.7 |  |  | 1.7 |
Other | 0.2 |  |  | (0.3 | )
Effective tax rate | 6.3 | % |  | 24.7 | %
On December 22, 2017, H.R. 1, known as the Tax Cuts and Jobs Act (the "Tax Act") was signed into law and makes significant changes to U.S. income tax law. Effective in 2018, the Tax Act reduced the U.S. federal corporate tax rate from 35% to 21%, created new taxes on certain foreign-sourced earnings and certain related-party payments, eliminated certain deductions and enhanced and extended through 2026 the option to claim accelerated depreciation deductions on qualified property. Due to the timing of the enactment and the complexity involved in applying the provisions of the Tax Act, we made reasonable estimates of the effects and recorded provisional amounts in our financial statements as of December 31, 2017. We remeasured deferred tax assets and liabilities resulting from the permanent reduction in the U.S. statutory corporate tax rate from 35% to 21% and recorded a provisional tax benefit of $6.3 million. We also analyzed the transition tax on accumulated foreign subsidiary earnings and made a provisional determination that we have no additional tax obligation. As we collect and prepare necessary data, and interpret the Tax Act and any additional guidance issued by the U.S. Treasury Department, the IRS, and other standard-setting bodies, we may make adjustments to the provisional amounts including estimates for certain employment compensation. Those adjustments may materially impact our provision for income taxes and effective tax rate in the period in which the adjustments are made. The SEC has provided up to a one-year measurement period for companies to finalize the accounting for the impacts of this new legislation and we anticipate finalizing our accounting over the next quarter. The effective tax rate for the nine months ended September 30, 2018 and 2017 differs from the statutory federal income tax rate of 21% and 35%, respectively, primarily due to state income taxes, net of federal tax benefits, general business credits, and employee stock-based compensation. The decrease in the effective tax rate for the nine months ended September 30, 2018 as compared to the nine months ended September 30, 2017 is primarily due to the decrease in the statutory federal tax rate noted above and higher excess tax benefits related to stock compensation as a result of an increase in the value of our stock price at the time equity awards are vested or exercised. In addition, the overall decrease in the effective tax rate for the nine months ended September 30, 2018 was partially offset by an increase to the IRC 162(m) limitation on executive compensation due to the Tax Act's repeal of the performance-based exception previously available under IRC 162(m). We establish a valuation allowance when we consider it more-likely-than-not that some portion or all of the deferred tax assets will not be realized. As of September 30, 2018 and 2017, we did not have a valuation allowance on any of our deferred tax assets as we believed it was more-likely-than-not that we would realize the benefits of our deferred tax assets. We are subject to examination by the Internal Revenue Service, or IRS, and various state tax authorities. We remain subject to examination of our federal income tax return for the years ended December 31, 2014 through 2016. We generally remain subject to examination of our various state income tax returns for a period of four to five years from the respective dates the returns were filed. As of September 30, 2018, we have net operating loss carryforwards of approximately $37.7 million and $33.7 million for federal and state tax purposes, respectively, which will be available to offset future income. If not used, these carryforwards will expire between 2020 and 2035. In addition, we have state business tax credits of approximately $11.8 million that can be carried forward indefinitely and other state business tax credits of approximately $1.2 million that will expire between 2023 and 2027. Note 11—Income Taxes (continued) As of September 30, 2018 and December 31, 2017, we had a liability of $6.5 million and $5.6 million, respectively, for unrecognized tax benefits related to various federal and state income tax matters excluding interest, penalties and related tax benefits. The reconciliation of the beginning unrecognized tax benefits balance to the ending balance is as follows:
| Nine Months Ended September 30,
| 2018 |  | 2017
| (In thousands)
Beginning balance | $ | 5,560 |  |  | $ | 7,314 |
Increases related to positions taken during prior years | 470 |  |  | 404 |
Increases related to positions taken during the current year | 1,170 |  |  | 1,119 |
Decreases related to positions settled with tax authorities | — |  |  | (1,189 | )
Decreases as a result of a lapse of applicable statute of limitations | (664 | ) |  | (1,392 | )
Ending balance | $ | 6,536 |  |  | $ | 6,256 |
The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate | $ | 6,536 |  |  | $ | 6,256 |
As of September 30, 2018 and 2017, we recognized accrued interest and penalties related to unrecognized tax benefits of approximately $0.3 million.

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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 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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