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Income Taxes | 12 Months Ended
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Dec. 31, 2013
Income Tax Disclosure [Abstract] |
Income Taxes | NOTE 10 – INCOME TAXES The Company recorded no income tax expense. The principal difference between the statutory tax rate of 34% and the Company’s effective tax rate is due to the Company permanent differences related to stock compensation and its change in valuation allowance. Deferred income taxes reflect the net tax effects of 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 the Company’s deferred tax assets are as follows (in thousands):
|  | December 31, |
|  | 2013 |  |  | 2012 |
Assets: |  |  |  |  |  |  |  |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 81,944 |  |  | $ | 73,129 |
Research and development tax credit carryforwards |  |  | 7,996 |  |  |  | 6,770 |
Capitalized research |  |  | — |  |  |  | 5 |
Stock-based compensation |  |  | 7,927 |  |  |  | 7,375 |
Deferred Revenue |  |  | 3,563 |  |  |  | — |
Other |  |  | 1,677 |  |  |  | 937 |
Total deferred tax asset |  |  | 103,107 |  |  |  | 88,216 |
Valuation allowance |  |  | (103,107 | ) |  |  | (88,216 | )
Net deferred tax assets |  | $ | — |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |
Net deferred tax liability related to intangible assets |  |  | (748 | ) |  |  | — |
Total deferred tax liability |  | $ | (748 | ) |  | $ | — |
As part of accounting for the acquisition of Ceregene, the Company recorded goodwill and intangible assets. The intangible assets acquired are for the use in a particular research and development project IPR&D and are considered indefinite-lived assets. They will remain indefinite lived until the completion or abandonment of the associated research and development efforts. Since the intangible assets acquired have no tax basis, a deferred tax liability was established due to the difference between the book and tax bases for those assets. The indefinite-lived asset is not treated as a future source of income and, therefore, no valuation allowance is released until the assets are amortized or abandoned, Realization of deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. Accordingly, the net deferred tax assets have been fully offset by a valuation allowance. The valuation allowance increased by $14.9 million, $5.4 million and $19.7 million for the years ended December 31, 2013, 2012 and 2011, respectively. As of December 31, 2013, Sangamo had net operating loss carryforwards for federal and state income tax purposes of approximately $209 million and $199 million, respectively. If not utilized, the net federal and state operating loss carryforwards will begin to expire in 2018 and 2014 respectively. The Company also has federal and state research tax credit carryforwards of $6.2 million and $6.5 million, respectively. The federal research credits will begin to expire in 2018 while the state research credits have no expiration date. Utilization of the Company’s net operating loss carryforwards and research tax credit carryforwards may be subject to substantial annual limitations due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions. The annual limitation could result in the expiration of the net operating loss carryforwards and research tax credit carryforwards before utilization. The Company files U.S and state income tax returns with varying statutes of limitations. The tax years from 1998 forward remain open to examination due to the carryover of net operating losses or tax credits. The Company also files a UK income tax return, and the tax years from 2007 and thereafter remain open to examination. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of December 31, 2013, the Company had no accrued interest and/or penalties. The unrecognized tax benefits may change during the next year for items that arise in the ordinary course of business. In the event that any unrecognized tax benefits are recognized, the effective tax rate will not be affected. The following table summarizes the activity related to the Company’s unrecognized tax benefits (in thousands):
|  | December 31, |
|  | 2013 |  |  | 2012 |  |  | 2011 |
Beginning balance |  | $ | 2,735 |  |  | $ | 2,750 |  |  | $ | 1,896 |
Additions based on tax positions related to the current year |  |  | 294 |  |  |  | 153 |  |  |  | 589 |
Additions for tax positions of prior years |  |  | 153 |  |  |  | 58 |  |  |  | 265 |
Reductions for tax positions of prior years |  |  | — |  |  |  | (227 | ) |  |  | — |
Ending balance |  | $ | 3,182 |  |  | $ | 2,734 |  |  | $ | 2,750 |

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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 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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