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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Components of the income tax benefit is as follows (in thousands):
| Years ended December 31,
| 2021 |  | 2020 |  |
Current: |  |  |  |  |
Federal | $ | — |  |  | $ | (6,115) |  |  |
State | 16 |  |  | 144 |  |  |
Foreign | — |  |  | (21) |  |  |
Total current | 16 |  |  | (5,992) |  |  |
Deferred: |  |  |  |  |
Federal | — |  |  | (116) |  |  |
State | (56) |  |  | (71) |  |  |
Foreign | — |  |  | — |  |  |
Total deferred | (56) |  |  | (187) |  |  |
Income tax benefit | $ | (40) |  |  | $ | (6,179) |  |  |
The components of loss before income taxes are as follows (in thousands):
| Years ended December 31,
| 2021 |  | 2020 |  |
United States | $ | (30,037) |  |  | $ | (141,864) |  |  |
Foreign | (529) |  |  | (765) |  |  |
Loss before income taxes | $ | (30,566) |  |  | $ | (142,629) |  |  |
A reconciliation of the U.S. federal statutory tax rate to the Company’s effective income tax rate is as follows:
|  |  | Years ended December 31,
|  |  |  |  | 2021 |  | 2020
U.S. federal statutory tax rate |  |  |  |  | 21.0 | % |  | 21.0 | %
State income taxes, net of federal benefit |  |  |  |  | 0.1 |  |  | 2.1 |
Non-U.S. income taxed at different rates |  |  |  |  | 0.5 |  |  | 0.2 |
Increase (reduction) in tax benefit related to stock-based awards |  |  |  |  | 0.1 |  |  | (0.2) |
Increase in valuation allowance |  |  |  |  | (24.9) |  |  | (20.3) |
Effect of tax rate differences of NOL carryback |  |  |  |  | — |  |  | 1.5 |
Permanent differences related to CARES Act |  |  |  |  | 2.6 |  |  | — |
Other |  |  |  |  | 0.7 |  |  | — |
Effective income tax rate |  |  |  |  | 0.1 | % |  | 4.3 | %
On March 27, 2020, the CARES Act was enacted in response to the COVID-19 pandemic. Among other things, the CARES Act provided the ability for taxpayers to carryback a net operating loss (“NOL”) arising in a taxable year beginning after December 31, 2017 and before January 1, 2021 to each of the five years preceding the year of the loss. Based on analysis of the extended NOL carryback provision, the Company recorded an income tax benefit and related receivable of $6.1 million as of March 31, 2020, which was received in July 2020. Further, the CARES Act included provisions to assist employers during the pandemic including the Employee Retention Credit (“ERC”). The ERC provision provides a refundable payroll tax credit on qualified wages paid by eligible employers to certain employees. On March 11, 2021, the American Rescue Plan Act of 2021 was enacted to combat the ongoing public health and economic impacts of the pandemic and provides some tax relief to businesses in the form of extending and modifying the ERC as well as other provisions. The Company applied for and received $2.9 million of refundable payroll tax credits during the year ended December 31, 2021. This was recorded as a credit to payroll taxes in SG&A. Fluctuations in effective tax rates have historically been impacted by permanent tax differences with no associated income tax impact, changes in state apportionment factors, including the effect on state deferred tax assets and liabilities, and non-U.S. income taxed at different rates. During the years ended December 31, 2021 and 2020, the effective tax rate was further impacted by permanent difference related to the CARES Act provisions and the NOL carryback claim, respectively. Deferred income taxes reflect the tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the value reported for income tax purposes, at the enacted tax rates expected to be in effect when the differences reverse. The components of deferred tax assets and liabilities are as follows (in thousands):
| December 31,
| 2021 |  | 2020
Deferred tax assets: |  |  |
Net operating loss carryforwards | $ | 33,166 |  |  | $ | 23,589 |
Intangible assets | 2,916 |  |  | 6,026 |
Tax credit carryforwards | 4,001 |  |  | 3,802 |
Goodwill | 5,284 |  |  | 4,087 |
Property and equipment | 3,229 |  |  | 3,640 |
Lease liability | 1,750 |  |  | 1,945 |
Inventory valuation reserves | 2,675 |  |  | 2,093 |
Allowance for doubtful accounts | 1,184 |  |  | 1,134 |
Accrued liabilities | 569 |  |  | 2,076 |
Accrued compensation | 401 |  |  | 657 |
Equity compensation | 399 |  |  | 435 |
Other | 304 |  |  | 353 |
Total gross deferred tax assets | 55,878 |  |  | 49,837 |
Valuation allowance | (54,875) |  |  | (48,671) |
Total deferred tax assets, net | 1,003 |  |  | 1,166 |
Deferred tax liabilities: |  |  |
ROU asset | (453) |  |  | (686) |
Prepaid insurance and other | (271) |  |  | (257) |
Total gross deferred tax liabilities | (724) |  |  | (943) |
Net deferred tax assets | $ | 279 |  |  | $ | 223 |
As of December 31, 2021, the Company had U.S. net operating loss carryforwards of $140.6 million, including $46.4 million expiring in various amounts from 2029 through 2037 which can offset 100% of taxable income and $94.2 million that has an indefinite carryforward period which can offset 80% of taxable income per year. The ability to utilize net operating losses and other tax attributes could be subject to a significant limitation if the Company were to undergo an “ownership change” for purposes of Section 382 of the Tax Code. We record a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets depends on the ability to generate sufficient taxable income of the appropriate character in the future and in the appropriate taxing jurisdictions.As of December 31, 2021 and 2020, the valuation allowance against the net federal and state deferred tax assets was $54.9 million and $48.7 million, respectively. Except for a state jurisdiction, the Company maintains a full valuation allowance on its deferred tax assets. The Company intends to reinvest the unremitted earnings of its non-U.S. subsidiaries. As of December 31, 2021, the Company had approximately $8.5 million in unremitted earnings from its foreign jurisdictions. As a result of the 2017 Tax Act these earnings have been previously taxed in the U.S. although they have not been repatriated to the U.S. However, certain withholding taxes will need to be paid upon repatriation. It is not practicable to estimate the amount of the deferred tax liability on such unremitted earnings. The Company performed an evaluation and concluded there are no uncertain tax positions requiring recognition in the Company’s financial statements. Tax years which remain subject to examination by tax jurisdictions as of December 31, 2021, are the years ended December 31, 2018 through December 31, 2021 for U.S. federal taxes and the years ended December 31, 2017 through December 31, 2021 for various state tax jurisdictions.

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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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