Deferred Tax Asset and Valuation Allowance. As a result of the goodwill and indefinite-lived intangible asset impairments recorded during the six months ended June 30, 2020, the Company has concluded a valuation allowance is required against its deferred tax assets as of June 30, 2021. In reaching this conclusion, in accordance with U.S. GAAP, the Company has evaluated all available evidence, both positive and negative and determined that the Company’s history of recent losses was sufficient significant negative evidence to require a valuation allowance. Therefore, the Company has recorded a valuation allowance to reduce its deferred tax assets as of June 30, 2021 to the amount that is more likely than not to be realized in future periods. At each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets.

Tax Refund. During the six months ended June 30, 2021, the Company received a $9.1 million tax refund related to the carryback of federal and state income tax net operating loss as a result of the CARES Act.

Effective Tax Rate. The effective income tax rate, expressed by calculating the income tax expense as a percentage of Income before income tax, was 9% for the six months ended June 30, 2021, which varied from the statutory federal income tax rate of 21%, primarily due to the tax benefit realized on stock-based compensation, offset in part by the valuation allowance on the Company’s net deferred tax asset position recorded during the six months ended June 30, 2021. The effective income tax rate was 14% for the six months ended June 30, 2020. The effective tax rate differed from the statutory federal income tax rate of 21%, primarily due to the tax impact of the goodwill and intangible asset impairments and the valuation allowance recorded during the six months ended June 30, 2020.


(In thousands, except percentages)	Three Months Ended June 30, 2021					Six Months Ended June 30, 2021
Income tax provision at statutory rate	$	1,213		21.0	%	$	2,596		21.0	%
State income taxes, net of federal income tax benefit		201		3.5			437		3.5
Tax credits		164		2.8			(819	)	(6.6	)
Stock-based compensation		(223	)	(3.9	)		(2,902	)	(23.5	)
Uncertain tax positions		22		0.4			1,211		9.8
Valuation allowance		(1,186	)	(20.5	)		1,227		9.9
Other, net		(380	)	(6.6	)		(633	)	(5.1	)
Income tax (benefit) expense	$	(189	)	(3.3	)%	$	1,117		9.0	%