INCOME TAXES	3 Months Ended
Mar. 31, 2017
INCOME TAXES
INCOME TAXES	7. INCOME TAXES The Company recorded an income tax benefit of $2,823,000 on pretax losses of $11,977,000 during the three months ended March 31, 2017 which represents an effective tax benefit rate of 23.6%. The company recorded an income tax benefit of $968,000 on a pretax loss of $9,568,000 during the three months ended March 31, 2016 which represents an effective tax benefit rate of 10.1%. The Company’s effective tax rate increased compared to the corresponding period from the prior year primarily due to the reversal of accrued uncertain tax position liabilities associated with the processing of outstanding amended returns that were accepted in the first quarter of 2017. The Company assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit the use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three year period ended December 31, 2016. Such objective evidence limits the ability to consider other subjective evidence, such as projections for taxable earnings. The income tax benefit for the three months ended March 31, 2017 does not include income tax benefits for all of the losses incurred because the Company recorded a full valuation allowance against its federal, state and foreign deferred tax assets with the exception of its trademark intangible and the foreign tax assets associated with net operating losses than can be carried back against prior losses. The Company has recorded a valuation allowance against the associated deferred tax assets for the amounts it deems are not more likely than not realizable. Based on management’s belief that not all the net operating losses are realizable, a federal valuation allowance of $4,026,000 and additional state valuation allowances of $258,000 were recorded during the three months ended March 31, 2017. In addition, due to our recent operating losses and valuation allowances, the Company may recognize reduced or no tax benefits on future losses on the condensed consolidated financial statements. The amount of the valuation allowance considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased, or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as projections for future growth.

7. INCOME TAXES

The Company recorded an income tax benefit of $2,823,000 on pretax losses of $11,977,000 during the three months ended March 31, 2017 which represents an effective tax benefit rate of 23.6%. The company recorded an income tax benefit of $968,000 on a pretax loss of $9,568,000 during the three months ended March 31, 2016 which represents an effective tax benefit rate of 10.1%. The Company’s effective tax rate increased compared to the corresponding period from the prior year primarily due to the reversal of accrued uncertain tax position liabilities associated with the processing of outstanding amended returns that were accepted in the first quarter of 2017.

The Company assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit the use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three year period ended December 31, 2016. Such objective evidence limits the ability to consider other subjective evidence, such as projections for taxable earnings.

The income tax benefit for the three months ended March 31, 2017 does not include income tax benefits for all of the losses incurred because the Company recorded a full valuation allowance against its federal, state and foreign deferred tax assets with the exception of its trademark intangible and the foreign tax assets associated with net operating losses than can be carried back against prior losses. The Company has recorded a valuation allowance against the associated deferred tax assets for the amounts it deems are not more likely than not realizable. Based on management’s belief that not all the net operating losses are realizable, a federal valuation allowance of $4,026,000 and additional state valuation allowances of $258,000 were recorded during the three months ended March 31, 2017. In addition, due to our recent operating losses and valuation allowances, the Company may recognize reduced or no tax benefits on future losses on the condensed consolidated financial statements. The amount of the valuation allowance considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased, or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as projections for future growth.