INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2016

Schedule of Components of Income Tax Expense (Benefit)

Our total provision/(benefit) from income taxes consists of the following for the years ended December 31, 2016, 2015, and 2014:

(in thousands)	2016		2015		2014

Current income tax provision:
Federal	$	11,717	$	7,264	$	4,034
State		1,321		611		273
Total		13,038		7,875		4,307

Deferred income tax (benefit)/provision:
Federal		(8,387)		(1,468)		2,113
State		(658)		(409)		154
Total		(9,045)		(1,877)		2,267

Change in valuation allowance		134		-		(16,726)
Excess tax benefit from stock-based compensation awards		617		360		784

Total provision/(benefit) for income taxes	$	4,744	$	6,358	$	(9,368)

Schedule of Effective Income Tax Rate Reconciliation

The difference between our expected income tax provision/(benefit) from applying federal statutory tax rates to the pre-tax income/(loss) and actual income tax provision/(benefit) relates primarily to the effect of the following:

	As of December 31,
	2016			2015			2014

US Federal statutory rate		35.0	%		35.0	%		35.0	%
State taxes, net of Federal benefit		2.1	%		2.1	%		1.0	%
International tax structure impacts		23.3	%		-	%		-	%
Domestic production activities deduction		(14.4)	%		(5.3)	%		-	%
Change in valuation allowance		1.6	%		-	%		(86.5)	%
Stock-based compensation – no windfall tax benefit		5.7	%		1.1	%		4.7	%
Stock-based compensation – windfall tax benefits		-	%		(0.1)	%		(1.2)	%
Change in tax rates and other		1.4	%		(3.5)	%		(1.4)	%
Total income tax provision/(benefit)		54.7	%		29.3	%		(48.4)	%

Schedule of Deferred Tax Assets and Liabilities

Deferred income taxes reflect the net tax effects of differences between the bases of assets and liabilities for financial reporting and income tax purposes. Our deferred income tax assets and liabilities consisted of the following:

(in thousands)	As of December 31,
	2016		2015
Deferred tax assets:
Accruals and advances	$	3,002	$	2,153
Bond hedge		10,921		12,243
Accruals for chargebacks and returns		7,137		2,945
Inventory		1,255		1,271
Intangible asset		6,302		3,631
Net operating loss carryforward		5,095		7,938
Other		1,680		1,149
Total deferred tax assets	$	35,392	$	31,330

Deferred tax liabilities:
Depreciation	$	(857)	$	(700)
Debt discount		(7,664)		(10,029)
Intangible assets		(353)		(3,127)
Other		(16)		(16)
Total deferred tax liabilities	$	(8,890)	$	(13,872)
Valuation allowance		(275)		(142)
Total deferred tax asset, net	$	26,227	$	17,316