10.	INCOME TAXES

Components of the provision for income taxes were as follows:

	Year Ended December 31,
	2017			2016		2015
Current:
Federal	$	-		$	-	$	-
State		150			200		242
Total		150			200		242

Deferred:
Federal		(424	)		-		-
State		-			-		-
Total		(424	)		-		-

Total (benefit) provision	$	(274	)	$	200	$	242

The components of the deferred tax assets are as follows:

	At December 31,
	2017			2016
Noncurrent deferred tax assets (liabilities)
Allowance for bad debts	$	3,792		$	5,904
Accrued rent		1,723			3,191
Accrued bonus		-			1,429
Accrued benefits		105			198
Stock-based compensation		387			557
Depreciation		15,520			20,372
Goodwill		594			1,959
Other intangibles		291			562
Pension plan liabilities		1,221			2,142
Net operating loss carryforwards		17,367			17,846
AMT credit		424			424
Total noncurrent deferred tax assets		41,424			54,584
Less valuation allowance		(41,000	)		(54,584	)
Noncurrent deferred tax assets, net of valuation allowance	$	424		$	-

Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence was the cumulative losses incurred by the Company in recent years.

On the basis of this evaluation the Company believes it is not more likely than not that it will realize its net deferred tax assets. As a result, as of December 31, 2017 and 2016, the Company has recorded a valuation allowance of $41.0 million and $54.6 million, respectively, against its net deferred tax assets.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation known as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act establishes new tax laws that will take effect in 2018, including, but not limited to (1) reduction of the U.S. federal corporate tax rate from a maximum of 35% to 21%; (2) elimination of the corporate alternative minimum tax (AMT); (3) a new limitation on deductible interest expense; (4) the repeal of the domestic production activity deduction; (5) limitations on the deductibility of certain executive compensation; and (6) limitations on net operating losses (NOLs) generated after December 31, 2017, to 80% of taxable income. In addition, certain changes were made to the bonus depreciation rules that will impact 2017.

ASC 740, Income Taxes requires the effects of changes in tax laws to be recognized in the period in which the legislation is enacted. However, due to the complexity and significance of the Tax Act's provisions, the SEC staff issued Staff Accounting Bulletin 118 (SAB 118), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act.

At December 31, 2017, the Company has not completed its accounting for the tax effects of enactment of the Tax Act; however, the Company has made a reasonable estimate of the effects of the Tax Act’s change in the federal rate and revalued its deferred tax assets based on the rates at which they are expected to reverse in the future, which is generally the new 21% federal corporate tax rate plus applicable state tax rate. Based on the Company’s initial analysis of the impact, it consequently recorded a decrease related to deferred tax assets of $17.7 million. The expense is offset with a corresponding release of valuation allowance.

The Tax Act eliminates the corporate AMT and changes how existing corporate AMT credits can be realized either to offset regular tax liability or to be refunded. As a result of this change, the Company released the valuation allowance against corporate AMT credits deferred tax asset and recorded a deferred tax provision benefit of $0.4 million. Offsetting this benefit was $0.1 million of income tax expense from various minimal state tax expenses.

The Tax Act did not have a material impact on our financial statements because we are under a full valuation allowance and we do not have any significant offshore earnings from which to record the mandatory transition tax.

The Tax Act requires the Company to assess whether its valuation allowance analyses are affected by various aspects of the Tax Act. Since, as discussed herein, we have recorded provisional amounts related to certain portions of the Tax Act, any corresponding determination of the need for or change in a valuation allowance is also provisional. The Company’s valuation allowance position did not change as a result of tax reform except for AMT credits which is discussed above and a reduction related to the change in the deferred tax rate.

The difference between the actual tax provision and the tax provision that would result from the use of the Federal statutory rate is as follows:

	Year Ended December 31,
	2017					2016					2015
Loss before taxes	$	(11,758	)			$	(28,104	)			$	(3,108	)

Expected tax benefit	$	(4,115	)	35.0	%	$	(9,836	)	35.0	%	$	1,088		35.0	%
State tax benefit (net of federal)		150		(1.3	)		200		(0.7	)		242		7.8
Valuation allowance		(13,920	)	118.4			9,726		(34.6	)		(1,228	)	(39.5	)
Federal tax reform - deferred rate change		17,671		(150.3	)		-		-			-		-
Other		(60	)	0.5			110		(0.4	)		140		4.5
Total	$	(274	)	2.3	%	$	200		-0.7	%	$	242		7.8	%

As of December 31, 2017 and 2016, the Company has net operating loss (“NOL”) carryforwards of $57.7 million and $39.7 million, respectively, which, if unused, will expire beginning in 2028 and ending in 2037. Utilization of the NOL carryforwards may be subject to a substantial limitation due to ownership change limitations that may occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), as well as similar state and foreign provisions. These ownership changes may limit the amount of NOL and tax credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an “ownership change” as defined by Section 382 of the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders or public groups.

As of December 31, 2017, 2016 and 2015, the Company no longer has any liability for uncertain tax positions. The Company recognizes accrued interest and penalties related to uncertain tax positions in income tax expense.

The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various states. The Company is no longer subject to U.S. federal income tax examinations for years before 2015 and, generally, is no longer subject to state and local income tax examinations by tax authorities for years before 2012.