The components of the provision for income taxes are as follows for the years ended December 31, 2020, 2019, and 2018 (in thousands):

	Year Ended December 31,
	2020		2019		2018
Current:
Federal	$	—	$	—	$	—
State and local		84		168		229
Total current tax expense		84		168		229
Deferred tax (benefit):
Federal		—		—		—
State and local		—		—		—
Total deferred tax (benefit)		—		—		—
Provision for income taxes	$	84	$	168	$	229

The Company’s effective tax rate for the years ended December 31, 2020, 2019, and 2018 was (0.04)%, (0.12)%, and (0.27)%, respectively.

A reconciliation of the provision for income taxes at the statutory rate to the amount reflected in the consolidated statements of operations is as follows (in thousands):

	Year Ended December 31,
	2020			2019			2018
Income taxes at statutory rate	$	(42,570	)	$	(29,990	)	$	(17,839	)
State income taxes, net of federal benefit		(5,417	)		(1,096	)		180
Permanent differences		1,264			772			229
Change in valuation allowance		46,901			30,051			17,756
Other		(94	)		431			(97	)
Provision for income taxes	$	84		$	168		$	229

The Company computes income taxes using the liability method. This method requires recognition of deferred tax assets and liabilities, measured by enacted rates, attributable to temporary differences between the financial statements and the income tax basis of assets and liabilities. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that certain deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in those specific jurisdictions prior to the dates on which such net operating losses expire. The Company maintained a full valuation allowance against its net deferred tax assets for December 31, 2020 and 2019 because the Company has determined that is it more likely than not that these assets will not be fully realized based on a current evaluation of expected future taxable income and the Company is in a cumulative loss position. As of December 31, 2020 and 2019 the Valuation Allowance balance was $121.9 million and $75.0 million, respectively. The Valuation Allowance was $44.9 million and $27.5 million as of December 31, 2018 and January 1, 2018, respectively.

Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands):

	As of December 31,
	2020			2019
Deferred tax assets:
Net operating loss carryforwards	$	102,252		$	66,879
Inventory reserves		12,409			5,911
Stock-based compensation		3,119			840
Accrued Expense		1,456			867
Depreciation		—			114
Right of Use Asset		4,175			—
Allowance for Doubtful Accounts		1,809			173
Other		836			423
Total deferred tax assets		126,056			75,207
Less: valuation allowance		(121,859	)		(74,959	)
Net deferred tax assets		4,197			248
Deferred tax liabilities:
Intangible amortization		(225	)		(248	)
Depreciation		(29	)		—
Lease Liability		(3,943	)		—
Net deferred tax liabilities		(4,197	)		(248	)
Net deferred income taxes	$	—		$	—

As of December 31, 2020, the Company had total net operating loss carryforwards for U.S. federal income tax purposes of $462.1 million, of which $126.2 million expire from 2034 through 2037 and $335.9 million do not expire. The Company has net operating loss carryforwards for state income tax purposes of $78.7 million, which expire from 2034 through 2040.

The Company is subject to tax in the United States and many state and local jurisdictions. The Company, with certain exceptions, is no longer subject to income tax examinations by U.S. federal, state and local for tax years 2015 and prior. The company is not currently under audit for any US federal or state income tax audits.

The Internal Revenue Code (IRC) Section 382 provides for a limitation of the annual use of net operating loss and tax credit carryforwards following certain ownership changes (as defined by the IRC Section 382) that limits the Company’s ability to utilize these carryforwards. The Company completed a Section 382 study to determine the applicable limitation, if any. It was determined that the Company has undergone three ownership changes. There were ownership changes in July 2013, November 2014 and July 2015 which substantially limit the use of the net operating losses generated before the change in control. The Company is still evaluating to see if the shareholder lock-up period expiration in December 2020 associated with the IPO, resulted in a change in control.

The Company has not identified any uncertain tax positions as of December 31, 2020 or 2019. Any interest and penalties related to uncertain tax positions shall be recorded as a component of income tax expense. To date, no interest or penalties have been accrued in relation to uncertain tax positions.