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Income Taxes
9 Months Ended
Sep. 30, 2018
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
The Company calculates its interim income tax provision by estimating the annual expected effective tax rate and applying that rate to its ordinary year to date earnings or loss. In addition, the effect of changes in enacted tax laws, rates or tax status is recognized in the interim period in which the change occurs.
For the three months ended September 30, 2018 and 2017, the effective tax rate was approximately 27.6% and 19.3%, respectively, based on the annual effective tax rate net of discrete federal and state taxes. For the nine months ended September 30, 2018 and 2017, the effective tax rate was approximately 23.9% and 24.0%, respectively, based on the annual effective tax rate net of discrete federal and state taxes. The Company’s effective tax rate for the three and nine months ended September 30, 2018 benefited from the decrease in the U.S. statutory tax rate from 35.0% in the prior year to 21.0% in the current period as a result of the Tax Reform Act that was enacted on December 22, 2017. The computation of the effective tax rate includes modifications from the statutory rate such as income tax credits, among other items. The difference in the effective tax rate relative to the statutory rate was primarily due to the change in the forecasted pretax income between quarters relative to the projected modifications to the tax rate during the three and nine months ended September 30, 2018 and a benefit related to the domestic production activities deduction and stock-based compensation during the three and nine months ended September 30, 2017. For the year of 2018, the Company will record a net operating loss for tax purposes due to the significant amount of capital expenditures, which are eligible for 100% expensing available under the Tax Reform Act.
In assessing the realizability of deferred tax assets, the Company considered whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. At September 30, 2018 and December 31, 2017, based on the Company’s future income projections, management determined it was more likely than not that the Company will be able to realize the benefits of the deductible temporary differences. As of September 30, 2018 and December 31, 2017, the Company determined no valuation allowance was necessary.

The Company has evaluated its tax positions taken as of September 30, 2018 and December 31, 2017 and believes all positions taken would be upheld under examination from income taxing authorities. Therefore, no liability for the effects of uncertain tax positions has been recorded in the accompanying consolidated balance sheets as of September 30, 2018 and December 31, 2017. The Company is open to examination by taxing authorities since incorporation.