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Income Taxes | 12 Months Ended
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Dec. 31, 2019
Income Taxes [Abstract] |
Income Taxes | NOTE 8. INCOME TAXES We are subject to income taxes in the United States and certain states in which we operate, and we use estimates in determining our provisions for income taxes. Significant management judgement is required in determining our provision for income taxes, deferred tax assets and liabilities and valuation allowances recorded against net deferred tax assets in accordance with U.S. GAAP. These estimates and judgements occur in the calculation of tax credits, benefits, and deductions, and in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes, as well as the interest and penalties related to uncertain tax positions. Significant changes to these estimates may result in an increase or decrease to our tax provision in the current or subsequent period. We assess all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. A s of each balance sheet date, unresolved uncertain tax positions must be reassessed, and we will determine whether the factors underlying the sustainability assertion have changed and the amount of the recognized tax benefit is still appropriate. During the years ended December 31, 2019, 2018 and 2017 income before taxes from U.S. operations were ($84.8) million, ($103.1) million and ($92.7) million, re spectively, and income before taxes from foreign operations was $0.9 million, $0.8 million and $1.0 million, respectively. ﻿ ﻿ Income tax provision (benefit) related to continuing operations differ from the amounts computed by applying the statutory income tax rate of 21% to pretax loss as follows (in thousands): ﻿
﻿ |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |
﻿ | Years ended December 31,
﻿ | 2019 |  |  | 2018 |  |  | 2017 |
﻿Statutory tax rate | 21.0 | % |  | 21.0 | % |  | 35.0 | %
﻿State tax rate, net of federal benefit | 4.9 |  |  | 3.5 |  |  | 8.6 |
﻿Stock-based compensation | (0.8) |  |  | (1.6) |  |  | (1.9) |
﻿Tax credits | 2.2 |  |  | 2.0 |  |  | 3.6 |
﻿Remeasurement of deferred taxes due to tax reform | - |  |  | - |  |  | (123.3) |
﻿Other | 0.2 |  |  | (0.1) |  |  | 0.3 |
﻿Change in valuation allowance | (27.5) |  |  | (24.8) |  |  | 77.7 |
﻿Total | - | % |  | - | % |  | - | %
﻿ ﻿ Deferred income taxes reflect the net tax effects of loss and credit carry forwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets for federal and state income taxes are as follows (in thousands): ﻿
﻿ |  |  |  |  |
﻿ |  |  |  |  |
﻿ | December 31,
﻿Deferred tax assets: | 2019 |  | 2018
﻿Net operating loss carryforwards | $ | 226,911 |  | $ | 212,424
﻿Research and development credits |  | 45,853 |  |  | 42,635
﻿Accruals and reserves |  | 8,024 |  |  | 4,774
﻿Stock-based compensation |  | 16,219 |  |  | 14,582
﻿Deferred rent |  | — |  |  | 3,315
﻿ASC842 Operating lease liability |  | 10,837 |  |  | —
﻿Total deferred tax assets |  | 307,844 |  |  | 277,730
﻿Less: Valuation allowance |  | (298,658) |  |  | (275,540)
﻿Total deferred tax assets: |  | 9,186 |  |  | 2,190
﻿Fixed assets |  | (1,425) |  |  | (2,190)
﻿ASC842 Operating lease right-of-use assets |  | (7,761) |  |  | —
﻿Total deferred tax liabilities |  | (9,186) |  |  | (2,190)
﻿Net deferred tax assets | $ | — |  | $ | —
﻿ ﻿ At December 31, 201 9, we maintained a full valuation allowance against all of our deferred tax assets which totaled $298.7 million, including net operating loss carryforwards and research and development credits of $226.9 mi llion and $45.9 million, respectively. 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, 2019 and 2018, respectively. For the year ended December 31, 2019 and 2018, our valuation allowance increased to $298.7 million and 275.5 million, respectively, primarily because of an increase to our net operating losses, and credits and changes in book to tax timing differences. As of December 31, 2019, we had a net operating loss carryforward for federal income tax purposes of approximately $889.6 million, portion of which will begin to expire in 2024. We had a total state net operating loss carryforward of approximately $609.4 million, which have expiration dates of 2025 and beyond. Utilization of some of the federal and state net operating loss and credit carryforwards are subject to annual limitations due to the “change of ownership” provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitations may result in the expiration of net operating losses and credits before utilization. We have federal credits of approximately $36.4 million, which will begin to expire in 2024 if not utilized and state research credits of approximately $36.8 million which have no expiration date. These tax credits are subject to the same limitations discussed above. As of December 31, 2019, our total unrecognized tax benefit was $22.0 million. A reconciliation of the beginning and ending unrecognized tax benefit balance is as follows (in thousands): ﻿
﻿ |  |
﻿ |  |
﻿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
﻿Decrease in balance related to tax positions taken in prior year |  | —
﻿Increase in balance related to tax positions taken during current year |  | 1,661
﻿Balance as of December 31, 2018 | $ | 20,447
﻿Decrease in balance related to tax positions taken in prior year |  | —
﻿Increase in balance related to tax positions taken during current year |  | 1,532
﻿Balance as of December 31, 2019 | $ | 21,979
﻿ Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of December 31, 201 9 and 201 8, we had no accrued interest or penalties due to our net operating losses available to offset any tax adjustment. If total unrecognized tax benefits were realized in the future, it would not result in any tax benefit as we currently have a full valuation allowance. 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 6 to present and December 31, 201 5 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. On December 22, 2017, the 2017 Tax Cuts and Jobs Act (Tax Act) was enacted into law and the new legislation contains several key tax provisions that affected us, including a one-time mandatory transition tax on accumulated foreign earnings and a reduction of the corporate income tax rate to 21% effective January 1, 2018, among others. We are required to recognize the effect of the tax law changes in the period of enactment, such as determining the transition tax, remeasuring our U.S. deferred tax assets and liabilities as well as reassessing the net realizability of our deferred tax assets and liabilities. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), which allowed us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. As a result, we previously provided a provisional estimate of the effect of the Tax Act in our financial statements. In the fourth quarter of 2018, we completed our analysis to determine the effect of the Tax Act and recorded immaterial adjustments as of December 31, 2018.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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