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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes We recorded an income tax provision of approximately $5.4 million, $2.6 million and $1.4 million for the years ended December 31, 2020, 2019 and 2018, respectively. The income tax provision for the years ended December 31, 2020, 2019 and 2018 was primarily due to state and foreign income tax expense. Our income tax provision consisted of the following (in thousands):
| Years Ended December 31,
| 2020 |  | 2019 |  | 2018
Current income taxes: |  |  |  |  |
Federal | $ | — |  |  | $ | (185) |  |  | $ | (91) |
State | 459 |  |  | 264 |  |  | (73) |
Foreign | 5,010 |  |  | 2,594 |  |  | 1,374 |
Total current income taxes | 5,469 |  |  | 2,673 |  |  | 1,210 |
Deferred income taxes: |  |  |  |  |
Federal | 187 |  |  | (17) |  |  | 155 |
State | 255 |  |  | 42 |  |  | 76 |
Foreign | (551) |  |  | (64) |  |  | (11) |
Total deferred income taxes | (109) |  |  | (39) |  |  | 220 |
Total income tax provision | $ | 5,360 |  |  | $ | 2,634 |  |  | $ | 1,430 |
Loss before provision for income taxes consisted of the following (in thousands):
| Years Ended December 31,
| 2020 |  | 2019 |  | 2018
United States | $ | (10,369) |  |  | $ | (12,497) |  |  | $ | (18,617) |
Foreign | 9,508 |  |  | 5,526 |  |  | 5,159 |
Total | $ | (861) |  |  | $ | (6,971) |  |  | $ | (13,458) |
The differences between our income tax provision as presented in the accompanying consolidated statements of operations and the income tax expense computed at the federal statutory rate consists of the items shown in the following table as a percentage of pretax loss (in percentages):
| Years Ended December 31,
| 2020 |  | 2019 |  | 2018
Income tax at U.S. statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State, net of federal benefit | (169.5) |  |  | (76.3) |  |  | 14.8 |
Foreign rate differential | (285.9) |  |  | (19.4) |  |  | (3) |
Share-based compensation | 2,901.5 |  |  | 695.4 |  |  | 178.7 |
Non-deductible expenses | (50.3) |  |  | 0.4 |  |  | (4.4) |
Tax credits | 351.6 |  |  | 19.3 |  |  | 26.7 |
Acquisition related | — |  |  | 31.8 |  |  | 15.2 |
Convertible senior notes | (5,854.8) |  |  | (412.6) |  |  | (0.3) |
Other | 1.2 |  |  | 27.9 |  |  | (1.8) |
Change in valuation allowance | 2,462.7 |  |  | (325.3) |  |  | (257.5) |
Total | (622.5) | % |  | (37.8) | % |  | (10.6) | %
A summary of our deferred tax assets is as follows (in thousands):
| As of December 31,
| 2020 |  | 2019 |  |
Deferred tax assets: |  |  |  |  |
Accrued expenses and reserves | $ | 6,365 |  |  | $ | 3,978 |  |  |
Share-based compensation | 6,473 |  |  | 12,003 |  |  |
Accrued compensation | 2,402 |  |  | 997 |  |  |
Net operating loss carryforwards | 190,904 |  |  | 162,320 |  |  |
Other items | 5,734 |  |  | 3,438 |  |  |
Gross deferred tax assets | 211,878 |  |  | 182,736 |  |  |
Valuation allowance | (151,825) |  |  | (148,519) |  |  |
Total deferred tax assets | 60,053 |  |  | 34,217 |  |  |
Deferred tax liabilities: |  |  |  |  |
Property and equipment, textbooks and intangibles assets | (4,066) |  |  | (4,111) |  |  |
Convertible senior notes | (51,607) |  |  | (27,065) |  |  |
Other | (5,890) |  |  | (4,661) |  |  |
Total deferred tax liabilities | (61,563) |  |  | (35,837) |  |  |
Net deferred tax liability | $ | (1,510) |  |  | $ | (1,620) |  |  |
At December 31, 2020 and 2019, the deferred tax liability is primarily created by the tax amortization of acquired indefinite lived intangible assets. Under the accounting guidance this deferred tax liability can be used as a source of income for recognition of deferred tax assets when determining the amount of valuation allowance to be recorded. As of December 31, 2020, we intend to permanently reinvest all 2020, 2019, and 2018 earnings from our foreign subsidiaries. As such, we have not provided for any remaining tax effect, if any, of the outside basis difference of our foreign subsidiaries based upon plans of future reinvestment. The determination of the future tax consequences of the remittance of these earnings is not practicable. Realization of the deferred tax assets is dependent upon future taxable income, the amount and timing of which are uncertain. Accordingly, the federal and state gross deferred tax assets have been fully offset by a valuation allowance. The valuation allowance increased by approximately $3.3 million during the year ended December 31, 2020 and increased by approximately $22.7 million during the year ended December 31, 2019. As of December 31, 2020, we had net operating loss carryforwards for federal and state income tax purposes of approximately $674 million and $511 million, respectively, which will begin to expire in years beginning 2028 and 2021, respectively. As of December 31, 2020, we had tax credit carryforwards for federal and state income tax purposes of approximately $19.1 million and $14.8 million, respectively. The federal credits expire in various years beginning in 2030. The state credits do not expire. Utilization of our net operating losses and tax credit carryforwards may be subject to substantial annual limitations due to ownership change limitations provided by the Internal Revenue Code of 1986, as amended (IRC), and similar state provisions. Such annual limitations could result in the expiration of the net operating losses and tax credit carryforwards before utilization. We recognize interest and penalties related to uncertain tax positions as a component of income tax expense. During the years ended December 31, 2020, 2019 and 2018, we recognized an increase of $0.1 million, an increase of $45 thousand and a decrease of $0.7 million of interest and penalties, respectively. Accrued interest and penalties as of December 31, 2020 and 2019 were approximately $0.2 million and $0.1 million, respectively. We file tax returns in U.S. federal, state, and certain foreign jurisdictions with varying statutes of limitations. Due to net operating loss and credit carryforwards, all of the tax years since inception through the 2020 tax year remain subject to examination by the U.S. federal and some state authorities. Foreign jurisdictions remain subject to examination up to approximately seven years from the filing date, depending on the jurisdiction. A reconciliation of the beginning and ending balances of the total amount of unrecognized tax benefits, excluding accrued interest and penalties, is as follows (in thousands):
| Years Ended December 31,
| 2020 |  | 2019 |  | 2018
Beginning balance | $ | 10,993 |  |  | $ | 8,771 |  |  | $ | 5,772 |
Increase in tax positions for prior years | 479 |  |  | 221 |  |  | 758 |
Decrease in tax positions for prior years | (535) |  |  | (1,550) |  |  | (569) |
Decrease in tax positions for prior year settlement | (208) |  |  | — |  |  | (149) |
Decrease in tax positions for prior years due to statutes lapsing | (26) |  |  | (164) |  |  | (103) |
Increase in tax positions for current year | 3,999 |  |  | 3,722 |  |  | 3,112 |
Change due to translation of foreign currencies | (48) |  |  | (7) |  |  | (50) |
Ending balance | $ | 14,654 |  |  | $ | 10,993 |  |  | $ | 8,771 |
The amount of unrecognized tax benefits, if recognized, that would affect the effective tax rate is $3.4 million for the year ended December 31, 2020. One or more of these unrecognized tax benefits could be subject to a valuation allowance if, and when recognized in a future period, which could impact the timing of any related effective tax rate benefit. The actual amount of any taxes due could vary significantly depending on the ultimate timing and nature of any settlement. We believe that the amount by which the unrecognized tax benefits may increase or decrease within the next 12 months is not estimable.

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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=84230637&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=116825942&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=84230637&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=116825942&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=84230637&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 + Details
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