INCOME TAXES

9 Months Ended

Sep. 30, 2021

Income tax provision consisted of the following (in thousands, except for effective tax rate percentage):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Income (loss) before benefit from (provision for) income taxes	$	4,111		$	2,759		$	12,135		$	(2,688)
Benefit from (provision for) income taxes	(340)			96			(987)			3
Effective tax rates	(8.3)		%	3.5		%	(8.1)		%	(0.1)		%

The provision for income tax for the three months and nine months ended September 30, 2021 and 2020, respectively, resulted primarily from estimated foreign taxes included in the calculation of the effective tax rate. We continue to carry a full valuation allowance on our U.S. federal and State as well as Canada federal deferred tax assets. The effective tax rate is lower than statutory tax rate mainly due to the benefit from the utilization of a Net Operating Loss ("NOL") in the current year for the U.S. federal and state jurisdictions.

As of September 30, 2021, we had unrecognized tax benefits under ASC 740 Income Taxes of approximately $4.3 million and applicable interest of $0. The total amount of unrecognized tax benefits that would affect our effective tax rate, if recognized, is $0. Our policy is to account for interest and penalties related to uncertain tax positions as a component of income tax provision. We do not expect to have any significant changes to unrecognized tax benefits during the next twelve months.

As of September 30, 2021, we had net deferred income tax assets of $2.7 million and deferred income tax liabilities of $0.4 million. Because we have net operating loss and credit carryforwards, there are open statutes of limitations in which federal, state, and foreign taxing authorities may examine our tax returns for all years from 2001 through the current period. We have received a letter of no change from the California Franchise Tax Board related to the examination for tax years 2017 and 2018. Currently we are under examination by the Internal Revenue Services for tax year 2018.

We maintain a valuation allowance of $28.5 million against certain of our deferred tax assets, including all federal, state, and certain foreign deferred tax assets because of uncertainties regarding the realization of the asset balance due to historical losses, the variability of operating results, and uncertainty regarding near term projected results. If we determine the deferred tax assets are realizable based on our assessment of relevant factors, an adjustment to the valuation allowance may increase income in the period such determination is made.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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