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Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
We recorded an income tax provision of approximately $7.2 million, $5.4 million and $2.6 million for the years ended December 31, 2021, 2020 and 2019, respectively. The income tax provision for the year ended December 31, 2021 was primarily due to state and foreign income tax expenses and the withholding taxes related to the sale of our strategic equity investment. The income tax provision for the years ended December 31, 2020 and 2019 was primarily due to state and foreign income tax expense.

Our income tax provision consisted of the following (in thousands):
Years Ended December 31,
202120202019
Current income taxes:
Federal$— $— $(185)
State852 459 264 
Foreign7,449 5,010 2,594 
Total current income taxes8,301 5,469 2,673 
Deferred income taxes:
Federal250 187 (17)
State218 255 42 
Foreign(1,572)(551)(64)
Total deferred income taxes(1,104)(109)(39)
Total income tax provision$7,197 $5,360 $2,634 

Loss before provision for income taxes consisted of the following (in thousands):
Years Ended December 31,
202120202019
United States$(6,256)$(10,369)$(12,497)
Foreign11,995 9,508 5,526 
Total$5,739 $(861)$(6,971)
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,
202120202019
Income tax at U.S. statutory rate21.0 %21.0 %21.0 %
State, net of federal benefit(232.0)(169.5)(76.3)
Foreign rate differential35.5 (285.9)(19.4)
Share-based compensation(209.0)2,901.5 695.4 
Non-deductible expenses1.5 (50.3)0.4 
Tax credits(28.3)351.6 19.3 
Acquisition related17.2 — 31.8 
Convertible senior notes(2,435.3)(5,854.8)(412.6)
Other0.5 1.2 27.9 
Change in valuation allowance2,954.3 2,462.7 (325.3)
Total125.4 %(622.5)%(37.8)%

A summary of our deferred tax assets is as follows (in thousands):
As of December 31,
20212020
Deferred tax assets:
Accrued expenses and reserves$6,402 $6,365 
Share-based compensation8,979 6,473 
Accrued compensation— 2,402 
Net operating loss carryforwards188,329 190,904 
Property and equipment, textbooks and intangibles assets1,849 — 
Convertible senior notes32,254 — 
Other items7,221 5,734 
Gross deferred tax assets245,034 211,878 
Valuation allowance(238,317)(151,825)
Total deferred tax assets6,717 60,053 
Deferred tax liabilities:
Property and equipment, textbooks and intangibles assets— (4,066)
Convertible senior notes— (51,607)
Other(7,878)(5,890)
Total deferred tax liabilities(7,878)(61,563)
Net deferred tax liability$(1,161)$(1,510)

At December 31, 2021 and 2020, 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, 2021, we intend to permanently reinvest all 2018 and later 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 $86.5 million during the year ended December 31, 2021 and increased by approximately $3.3 million during the year ended December 31, 2020.

As of December 31, 2021, we had net operating loss carryforwards for federal and state income tax purposes of approximately $660 million and $485 million, respectively, which will begin to expire in years beginning 2028 and 2022, respectively.

As of December 31, 2021, we had tax credit carryforwards for federal and state income tax purposes of approximately $21.4 million and $15.7 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, 2021, 2020 and 2019, we recognized an increase of $0.1 million, $0.1 million and $45 thousand of interest and penalties, respectively. Accrued interest and penalties as of December 31, 2021 and 2020 were approximately $0.3 million and $0.2 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 2021 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,
202120202019
Beginning balance$14,654 $10,993 $8,771 
Increase in tax positions for prior years305 479 221 
Decrease in tax positions for prior years(952)(535)(1,550)
Decrease in tax positions for prior year settlement(22)(208)— 
Decrease in tax positions for prior years due to statutes lapsing(426)(26)(164)
Increase in tax positions for current year3,309 3,999 3,722 
Change due to translation of foreign currencies(63)(48)(7)
Ending balance$16,805 $14,654 $10,993 

The amount of unrecognized tax benefits, if recognized, that would affect the effective tax rate is $4.5 million for the year ended December 31, 2021. 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.