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Income Taxes | 12 Months Ended
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Dec. 31, 2017
Income Taxes [Abstract] |
Income Taxes | NOTE 8. INCOME TAXES ﻿ A reconciliation between the statutory federal income tax and our effective tax rates as a percentage of loss before income taxes are as follows:
﻿ |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |
﻿ | Years ended December 31,
﻿ | 2017 |  |  | 2016 |  |  | 2014 |
﻿Statutory tax rate | 35.0 | % |  | 35.0 | % |  | 35.0 | %
﻿State tax rate, net of federal benefit | 8.6 |  |  | 5.4 |  |  | (3.5) |
﻿Stock-based compensation | (1.9) |  |  | (1.6) |  |  | (4.0) |
﻿R&D credit | 3.6 |  |  | 5.0 |  |  | 11.0 |
﻿Tax reform | (123.3) |  |  | - |  |  | - |
﻿Other | 0.3 |  |  | (0.9) |  |  | (0.6) |
﻿Change in valuation allowance | 77.7 |  |  | (42.9) |  |  | (37.9) |
﻿Effective income tax rate | 0.0 | % |  | 0.0 | % |  | 0.0 | %
﻿ ﻿ Temporary differences and carryforwards that gave rise to significant portions of deferred taxes are as follows (in thousands): ﻿
﻿ |  |  |  |  |
﻿ |  |  |  |  |
﻿ | December 31,
﻿Deferred tax assets: | 2017 |  | 2016
﻿Net operating loss carryforwards | $ | 194,440 |  | $ | 264,183
﻿Research and development credits |  | 39,145 |  |  | 32,043
﻿Accruals and reserves |  | 14,480 |  |  | 20,088
﻿Depreciation |  | — |  |  | 1,170
﻿Deferred rent |  | 3,360 |  |  | —
﻿Total deferred tax assets |  | 251,425 |  |  | 317,484
﻿Less: Valuation allowance |  | (249,202) |  |  | (317,412)
﻿Deferred tax liabilities: |  |  |  |  |
﻿Depreciation |  | (2,223) |  |  | —
﻿Deferred rent |  |  |  |  | (72)
﻿Net deferred tax assets | $ | — |  | $ | —
﻿ Due to uncertainties surrounding the realization of deferred tax assets through future taxable income, we have provided a full valuation allowance and, therefore, have not recognized any benefits from net operating losses and other deferred tax assets. A valuation allowance is recorded when it is more likely than not that all or some portion of the deferred income tax assets will not be realized. We regularly assess the need for a valuation allowance against our deferred income tax assets by considering both positive and negative evidence related to whether it is more likely than not that our deferred income tax assets will be realized. In evaluating our ability to recover our deferred income tax assets within the jurisdiction from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred income tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. Accordingly, we have provided a full valuation allowance against our net deferred tax assets as of December 31, 2017 and 2016, respectively For the year ended December 31, 201 7, our valuation allowance de creased to $249.2 m illion relative to the 2016 allowance primarily due to the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), which was enacted in December 2017 (see further details below). For the year ended December 31, 201 6, our valuation allowance increased to $317.4 million relative to the 2015 allowance primarily because of an increase in deferred tax assets related to net operating losses, state tax credits, and changes in accruals and reserves. As of December 31, 201 7, we had federal and state net operating loss carryforwards of approximately $757.0 m illion and $532.2 million, respectively, available to reduce future taxable income, if any. The federal net operating loss carryforward s begin expiring in 2024, and the state net operating loss carryforward s have expiration in 2017 and beyond. We also had federal and California state research and development credit carryforwards of approximately $30.8 million and $31.8 million, respectively, as of December 31, 201 7. The federal research and development credits begin expiring in 2024 if not utilized. The California tax research and development credits can be carried forward indefinitely. We adopted ASU 2016-09 during the first quarter of 2017. Prior to adopting ASU2016-09, t ax attributes related to stock option windfall deductions were not recorded until they result ed in a reduction of cash tax payable. The impact from adopting ASU2016-09 was a tax affected increase to the federal and state deferred tax assets of $6.0 million and $0.6 million, respectively, with a corresponding adjustment to our valuation allowance. The Tax Reform Act of 1986 limits the use of net operating loss and tax credit carryforwards in certain situations where equity transactions result in a change of ownership as defined by Internal Revenue Code Section 382. In the event we experience an additional ownership change for tax purposes, utilization of our United States net operating loss and tax credit carryforwards could be limited. As of December 31, 201 7, our total unrecognized tax benefit was $1 8.8 million, of which none of the tax benefit, if recognized, would affect the effective income tax rate due to the valuation allowance that currently offsets deferred tax assets. We do not anticipate the total amount of unrecognized income tax benefits to significantly increase or decrease in the next 12 months. A reconciliation of the beginning and ending unrecognized tax benefit balance is as follows (in thousands): ﻿
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﻿ |  |
﻿Balance as of December 31, 2014 | $ | 16,952
﻿Decrease in balance related to tax positions taken in prior year |  | (44)
﻿Increase in balance related to tax positions taken during current year |  | 1,827
﻿Balance as of December 31, 2015 |  | 18,735
﻿Decrease in balance related to tax positions taken in prior year |  | (3,892)
﻿Increase in balance related to tax positions taken during current year |  | 1,942
﻿Balance as of December 31, 2016 |  | 16,785
﻿Decrease in balance related to tax positions taken in prior year |  | —
﻿Increase in balance related to tax positions taken during current year |  | 2,001
﻿Balance as of December 31, 2017 | $ | 18,786
﻿ Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of December 31, 2017 and 201 6, we had no accrued interest or penalties due to our net operating losses available to offset any tax adjustment. We file U.S. federal and various state income tax returns. For U.S. federal and state income tax purposes, the statute of limitations currently remains open for the years ending December 31, 201 4 to present and December 31, 201 3 to present, respectively. In addition, all of the net operating losses and research and development credit carryforwards that may be utilized in future years may be subject to examination. We are not currently under examination by income tax authorities in any jurisdiction. The Tax Act was enacted on December 22, 2017 and introduces significant changes to U.S. income tax law. Among the many changes effective in 2018, the Tax Act reduces the U.S. statutory tax rate from 35% to 21% and creates new taxes on certain foreign-sourced earnings. In addition, in 2017 we were sub ject to a one-time transition tax on accumulated foreign subsidiary earnings not previously subject to U.S. income tax. Due to the timing of the enactment and the complexity involved in applying the provisions of the Tax Act, we have made reasonable estimates of the effects and recorded provisional amounts in the financial statements as of December 31, 2017. As we collect and analyze data, interpret the Tax Act, and receive additional guidance issued by the U.S. Treasury Department, the IRS, and other standard-setting bodies, it may make adjustments to the provisional amounts. Those adjustments may impact the provision for income taxes and effective tax rate in the period in which the adjustments are made. The accounting for the tax effects of the Tax Act will be completed in 2018. The Tax Act reduces the U.S. statutory tax rate from 35% to 21% for years after 2017. Accordingly, we have re-measured our deferred taxes as of December 31, 2017 to reflect the reduced rate that will apply in future periods when the deferred taxes are settled or realized. We have also adjusted our valuation allowance on our deferred tax assets as a result of changes in the Tax Act. Provisional amounts for the one-time transition tax have been recorded as of December 31, 2017 and are subject to change during 2018. The Tax Act requires us to pay U.S. income taxes on accumulated foreign subsidiary earnings not previously subject to U.S. income tax at a rate of 15.5% to the extent of foreign cash and certain other net current assets and 8% on the remaining earnings. We have recorded a provisional amount for the one-time transitional tax , which is fully offset by current year net operating losses. The provisional amount is based on estimates of the effects of the Tax Act, as a full analysis requires significant data from our foreign subsidiaries that is not regularly collected or analyzed. The total provisional adjustments to our tax provision for the year ended December 31, 2017 is a non-cash impact of $113.0 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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