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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Income Before Income Taxes | Income before income taxes consists of the following (in thousands):
|  | Years Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
Domestic |  | $ | (14,637 | ) |  | $ | 17,718 |  |  | $ | 20,061 |
Foreign |  |  | 5,038 |  |  |  | 5,807 |  |  |  | 7,310 |
Total |  | $ | (9,599 | ) |  | $ | 23,525 |  |  | $ | 27,371 |
Components of the Income Tax Expense (Benefit) | The components of the income tax expense (benefit) are as follows (in thousands):
|  | Years Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 618 |  |  | $ | 2,278 |  |  | $ | 2,587 |
State |  |  | 911 |  |  |  | 1,173 |  |  |  | 1,060 |
Foreign |  |  | 2,399 |  |  |  | 1,763 |  |  |  | 2,159 |
Total current |  |  | 3,928 |  |  |  | 5,214 |  |  |  | 5,806 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (1,454 | ) |  |  | 2,111 |  |  |  | 5,550 |
State |  |  | (2,005 | ) |  |  | 667 |  |  |  | 700 |
Foreign |  |  | (498 | ) |  |  | 153 |  |  |  | 175 |
Total deferred |  |  | (3,957 | ) |  |  | 2,931 |  |  |  | 6,425 |
Income tax expense (benefit) |  | $ | (29 | ) |  | $ | 8,145 |  |  | $ | 12,231 |
Reconciliation of the Federal Statutory Rate | A reconciliation of the federal statutory rate to Forrester’s effective tax rate is as follows:
|  | Years Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
Income tax provision at federal statutory rate |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 35.0 | %
Increase (decrease) in tax resulting from: |  |  |  |  |  |  |  |  |  |  |  |
State tax provision, net of federal benefit |  |  | 8.3 |  |  |  | 6.2 |  |  |  | 4.0 |
Foreign tax rate differential |  |  | 0.4 |  |  |  | (0.2 | ) |  |  | (3.4 | )
Stock option compensation deduction |  |  | (1.2 | ) |  |  | (1.1 | ) |  |  | 0.1 |
Withholding taxes |  |  | (3.5 | ) |  |  | 2.1 |  |  |  | 1.7 |
Non-deductible expenses |  |  | (9.8 | ) |  |  | 5.3 |  |  |  | 1.8 |
Change in valuation allowance |  |  | 2.3 |  |  |  | — |  |  |  | 3.9 |
Foreign subsidiary income subject to U.S. tax |  |  | (7.4 | ) |  |  | — |  |  |  | — |
Change in tax legislation |  |  | (1.2 | ) |  |  | 1.9 |  |  |  | 5.8 |
Audit settlements |  |  | (8.3 | ) |  |  | — |  |  |  | (4.0 | )
Other, net |  |  | (0.3 | ) |  |  | (0.6 | ) |  |  | (0.2 | )
Effective tax rate |  |  | 0.3 | % |  |  | 34.6 | % |  |  | 44.7 | %
Components of Deferred Income Taxes | The components of deferred income taxes are as follows (in thousands):
|  | As of December 31, |
|  | 2019 |  |  | 2018 |
Non-deductible reserves and accruals |  | $ | 2,743 |  |  | $ | 3,835 |
Net operating loss and other carryforwards |  |  | 13,049 |  |  |  | 7,954 |
Stock compensation |  |  | 2,651 |  |  |  | 2,125 |
Depreciation and amortization |  |  | — |  |  |  | 727 |
Lease liability |  |  | 17,382 |  |  |  | — |
Gross deferred tax asset |  |  | 35,825 |  |  |  | 14,641 |
Less - valuation allowance |  |  | (2,274 | ) |  |  | (2,574 | )
Sub-total |  |  | 33,551 |  |  |  | 12,067 |
Other liabilities |  |  | (1,085 | ) |  |  | (1,249 | )
Depreciation and amortization |  |  | (1,567 | ) |  |  | — |
Goodwill and intangible assets |  |  | (32,120 | ) |  |  | (6,201 | )
Operating lease right-of-use assets |  |  | (15,005 | ) |  |  | — |
Deferred commissions |  |  | (5,706 | ) |  |  | (4,479 | )
Net deferred tax asset (liability) |  | $ | (21,932 | ) |  | $ | 138 |
Summary of Changes in Deferred Tax Valuation Allowance | The following table provides a summary of the changes in the deferred tax valuation allowance for the years ended December 31, 2019, 2018, and 2017 (in thousands):
|  | 2019 |  |  | 2018 |  |  | 2017 |
Deferred tax valuation allowance at January 1 |  | $ | 2,574 |  |  | $ | 2,686 |  |  | $ | 2,193 |
Additions |  |  | 30 |  |  |  | 74 |  |  |  | 1,439 |
Deductions |  |  | (356 | ) |  |  | (139 | ) |  |  | (70 | )
Change in tax legislation |  |  | — |  |  |  | — |  |  |  | (954 | )
Translation adjustments |  |  | 26 |  |  |  | (47 | ) |  |  | 78 |
Deferred tax valuation allowance at December 31 |  | $ | 2,274 |  |  | $ | 2,574 |  |  | $ | 2,686 |
Reconciliation of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is summarized as follows for the years ended December 31, 2019, 2018, and 2017 (in thousands):
|  | 2019 |  |  | 2018 |  |  | 2017 |
Unrecognized tax benefits at January 1 |  | $ | 799 |  |  | $ | 806 |  |  | $ | 1,774 |
Reductions for tax positions of prior years |  |  | (458 | ) |  |  | — |  |  |  | — |
Additions for tax positions of current year |  |  | — |  |  |  | — |  |  |  | - |
Settlements |  |  | — |  |  |  |  |  |  |  | (986 | )
Translation adjustments |  |  | 4 |  |  |  | (7 | ) |  |  | 18 |
Unrecognized tax benefits at December 31 |  | $ | 345 |  |  | $ | 799 |  |  | $ | 806 |

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