Income Taxes	9 Months Ended
Sep. 30, 2020
Income Taxes
Income Taxes	Note 13. Income Taxes Income tax expense was $2.8 million for the three months ended September 30, 2020, compared to $0.3 million benefit for the three months ended September 30, 2019. The $3.1 million increase was primarily due to a $13.2 million increase in pretax income. The income tax provision was $6.1 million during the nine months ended September 30, 2020, compared to $0.9 million for the nine months ended September 30, 2019. The $5.2 million increase was primarily due to a $33.2 million increase in pretax income partially offset by a $2.0 million tax benefit relating to equity compensation. The effective tax rate for the three and nine months ended September 30, 2020 and 2019, respectively, was less than the U.S. statutory rate of 21% due to favorable discrete items related to equity compensation in those periods and Federal research and development tax credits that reduce the annual tax rate. We had $58.2 million and $68.1 million of net deferred tax assets worldwide relating to net operating loss carryforwards, tax credit carryforwards and other temporary differences, as of September 30, 2020 and December 31, 2019, respectively. These deferred tax assets are available to reduce income taxes in future years. We have a $9.2 million valuation allowance in the U.S. against certain tax credits and state net operating losses due to the uncertainty of their realization based on long-term Company forecasts and the expiration dates on these tax assets. If future operating results of the Company within the U.S. or these foreign jurisdictions are significantly less than our expectations, it is reasonably possible that we would be required to record an additional valuation allowance on our deferred tax assets in the future.

Income Taxes

9 Months Ended

Sep. 30, 2020

Note 13. Income Taxes

Income tax expense was $2.8 million for the three months ended September 30, 2020, compared to $0.3 million benefit for the three months ended September 30, 2019. The $3.1 million increase was primarily due to a $13.2 million increase in pretax income. The income tax provision was $6.1 million during the nine months ended September 30, 2020, compared to $0.9 million for the nine months ended September 30, 2019. The $5.2 million increase was primarily due to a $33.2 million increase in pretax income partially offset by a $2.0 million tax benefit relating to equity compensation. The effective tax rate for the three and nine months ended September 30, 2020 and 2019, respectively, was less than the U.S.

statutory rate of 21% due to favorable discrete items related to equity compensation in those periods and Federal research and development tax credits that reduce the annual tax rate.

We had $58.2 million and $68.1 million of net deferred tax assets worldwide relating to net operating loss carryforwards, tax credit carryforwards and other temporary differences, as of September 30, 2020 and December 31, 2019, respectively. These deferred tax assets are available to reduce income taxes in future years. We have a $9.2 million valuation allowance in the U.S. against certain tax credits and state net operating losses due to the uncertainty of their realization based on long-term Company forecasts and the expiration dates on these tax assets. If future operating results of the Company within the U.S. or these foreign jurisdictions are significantly less than our expectations, it is reasonably possible that we would be required to record an additional valuation allowance on our deferred tax assets in the future.