12. Income Taxes

The Company’s components of loss before income taxes (in thousands) are as follows:


	Year Ended December 31,
	2017		2016		2015
Domestic	$	(31,714)	$	(41,162)	$	(36,230)
Foreign		(4,866)		(5,079)		(3,804)
Loss before income taxes	$	(36,580)	$	(46,241)	$	(40,034)

The Company’s components of income tax benefit (in thousands) are as follows:


	Year Ended December 31,
	2017		2016		2015
Current federal benefit	$	40	$	215	$	280
Current state benefit (expense)		3,545		181		(571)
Current foreign benefit		2,492		—		—
Deferred federal (expense) benefit		(51)		5,795		12,499
Deferred state benefit (expense)		697		(847)		860
Deferred foreign (expense) benefit		(1,409)		1,105		687
Income tax benefit	$	5,314	$	6,449	$	13,755

The 2017 Tax Cuts and Jobs Act was enacted on December 22, 2017 resulting in significant changes to the Internal Revenue Code. This reform changed the U.S. Statutory tax rate from 35% to 21% for tax years beginning after December 31, 2017. The Company is required to recognize the effect of the tax law changes in the period of enactment, such as remeasuring the domestic deferred tax assets and liabilities as well as reassessing the net realizability of deferred tax assets and liabilities. Due to the Company’s current loss position and domestic valuation allowances, this tax reform will not have a material impact on the consolidated financials.

In December 2017, the Securities and Exchange Commission staff issued Accounting Bulleting No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which allows companies to record provisional amounts during a measurement period not to extend beyond one year from the enactment date. Due to the Tax Cuts and Jobs act being enacted in late fourth quarter of 2017 and subsequent guidance expected throughout the next 12 months, the accounting of deferred tax re-measurement is considered incomplete due to forthcoming guidance and the ongoing analysis of final year-end data and tax positions. Analysis is expected to be completed within the measurement period in accordance with SAB 118. Subsequent adjustments are not expected to have a material impact on the consolidated financials due to the domestic loss position and the associated valuation allowances on the domestic deferred tax assets.

The income tax provision differs from the amount computed by applying the statutory federal income tax rate to losses before income taxes as follows (in thousands):


	Year Ended December 31,
	2017		2016		2015
Tax benefit computed at statutory rate of 35%	$	12,803	$	16,184	$	14,012
Change in valuation allowance		(4,564)		(10,200)		(502)
State income tax benefit (expense), net of federal tax		2,757		(433)		423
Foreign losses		1,593		985		954
Transaction costs		—		—		(445)
Tax reform impact to deferred tax balances (1)		(7,590)		—		—
Other		315		(87)		(687)
Income tax benefit	$	5,314	$	6,449	$	13,755

(1)

Due to the Tax Cuts and Jobs Act enacted on December 22, 2017, the Company’s domestic deferred tax assets and liabilities were remeasured from 35% to 21% as of December 31, 2017. The change in tax rate resulted in a decrease to the gross domestic deferred tax asset which is offset by a corresponding decrease to the valuation allowance.

The principal components of the Company’s net deferred tax (liabilities) assets are as follows (in thousands):


	December 31,
	2017		2016
Deferred tax assets:
Federal tax net operating loss ("NOL") carryforward	$	21,014	$	32,746
Foreign tax NOL carryforward		4,410		4,486
Deferred revenue		626		462
Restricted stock and restricted stock unit awards		192		318
Workers’ compensation		64		74
State tax NOL carryforward		1,529		1,223
Self-insurance		128		219
Canadian start-up costs		156		275
Alternative Minimum Tax ("AMT") credit carryforward		315		315
Foreign tax credit		—		1,874
Foreign deferred taxes		874		(535)
Other comprehensive income		242		786
Uncertain tax positions		—		512
Other		80		271
Gross deferred tax assets		29,630		43,026
Less valuation allowances		(17,366)		(13,602)
Net deferred tax assets		12,264		29,424
Deferred tax liabilities:
Property and equipment		(12,914)		(29,035)
Net deferred tax (liabilities) assets	$	(650)	$	389
Foreign deferred tax (liabilities) assets	$	(874)	$	535
Domestic deferred tax assets (liabilities)		224		(146)
Net deferred tax (liabilities) assets	$	(650)	$	389

At December 31, 2017, the Company had a NOL for U.S. federal income tax purposes of approximately $100,065,000. This NOL will begin to expire in 2027. The Company will carry forward the tax benefits related to federal NOL of approximately $21,014,000. The Company also had state NOL’s that will affect state taxes of approximately $1,935,000 at December 31, 2017. State NOL’s began to expire in 2015. The Company also had a Canadian NOL of $16,963,000 that will begin to expire in 2037.

In evaluating the possible sources of taxable income during 2017, the Company determined it is more likely than not that the remaining deferred tax assets will not be realizable. As a result, the Company recorded full valuation allowances against its federal and state deferred tax assets with the exception of its trademark intangible and the AMT credit which will be refundable within the next five years. A partial valuation allowance was recorded against foreign deferred tax assets excluding losses which are expected to be absorbed by future temporary differences.

A summary of the Company’s gross uncertain tax positions at December 31, 2017 and 2016 as well as activity for the years then ended are as follows (in thousands):


	December 31,
	2017		2016
Balance at beginning of year	$	1,489	$	1,684
Decrease in prior year tax positions		—		(14)
Increase in current year tax positions		—		157
Liability statute expiration		(1,489)		(338)
Balance at end of year	$	—	$	1,489

The Company’s policy is to recognize interest and penalties related to uncertain tax positions in income tax expense.

Due to the resolution of amended federal, state and foreign tax returns and the expiration of various statutes of limitations, the full uncertain tax positions balance at December 31, 2016 reversed in the twelve months ended December 31, 2017.