8.	INCOME TAXES

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cut and Jobs Act (the “Tax Act”). The Tax Act includes a number of changes to existing U.S. tax laws that impact the Company, most notably a reduction of the U.S. corporate income tax rate from 35% to 21% effective January 1, 2018. Other changes include the acceleration of depreciation for certain assets placed into service after September 27, 2017 as well as, prospective changes beginning in 2018 including additional limitations on executive compensation.

The Company recorded income taxes at an estimated effective income tax rate applied to income before income tax expense of 22.5% in both the three and nine months ended September 30, 2018, respectively, which was reduced to 22.3% and 20.7%, respectively, after recording discrete items and changes in the valuation allowance. The Company recognized an excess tax benefit from share-based compensation of $69 and $931 in the three and nine months ended September 30, 2018, respectively, within income tax expense in the accompanying consolidated statements of operations. Additionally, in the nine months ended September 30, 2018, the Company recorded a tax benefit of $93 for changes in valuation allowances due to changes in state tax legislation and the Company’s business. The Company recorded income taxes at an estimated effective income tax rate applied to income before income tax expense of 35.1% in both the three and nine months ended September 30, 2017, which was reduced to 29.8% and 29.5%, respectively, after recording discrete items. The Company recognized an excess tax benefit from share-based compensation of $1,007 and $3,714 in the three and nine months ended September 30, 2017, within income tax expense in the accompanying consolidated statements of operations. The Company offsets taxable income for state tax purposes with net operating loss carryforwards. At December 31, 2017, the Company had net operating loss carryforwards of approximately $27,948 for state tax purposes. For state tax purposes, there is a limitation on the amount of net operating loss carryforwards that can be utilized in a given year to offset state taxable income and management believes that some of the net operating loss carryforwards will be subject to this annual limit in 2018. State net operating loss carryforwards will begin to expire in 2025. The total amount of gross unrecognized tax benefits as of September 30, 2018 and December 31, 2017 was $147 and $131, respectively. The total amount of unrecognized tax benefits that, if recognized, would affect the effective income tax rate is approximately $116 and $103 as of September 30, 2018 and December 31, 2017, respectively.