11.	INCOME TAXES

Components of the provision for income taxes were as follows:

	Year Ended December 31,
	2018		2017			2016
Current:
Federal	$	-	$	-		$	-
State		200		150			200
Total		200		150			200

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

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

Effective Tax rate

The reconciliation of the effective tax rate to the U.S. Statutory Federal Income tax rate was:

	Year Ended December 31,
	2018					2017					2016
Loss before taxes	$	(6,345	)			$	(11,758	)			$	(28,104	)

Expected tax benefit	$	(1,332	)	21.0	%	$	(4,115	)	35.0	%	$	(9,836	)	35.0	%
State tax benefit (net of federal)		200		(3.2	)		150		(1.3	)		200		(0.7	)
Valuation allowance		1,230		(19.4	)		(13,920	)	118.4			9,726		(34.6	)
Federal tax reform - deferred rate change		49		(0.8	)		17,671		(150.3	)		-		-
Other		53		(0.8	)		(60	)	0.5			110		(0.4	)
Total	$	200		(3.2	)%	$	(274	)	2.3	%	$	200		(0.7	)%

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 took 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) limitation 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 impacted fiscal year 2017.

Our provision for income taxes was $0.2 million, or 3.2% of pretax loss, for the year ended December 31, 2018, compared to a benefit for income taxes of $0.3 million, or 2.3% of pretax loss, in the prior year comparable period. No federal or state income tax benefit was recognized for the current period loss due to the recognition of a full valuation allowance. Income tax expense resulted from various minimal state tax expenses.

The deferred tax provision benefit in the prior year was due to recognition of $ 0.4 million of valuation allowance for the AMT credits. The tax expense in prior year included an adjustment to measure net deferred tax assets at the new U.S. tax rate of 21%. The expense was offset with a corresponding release of valuation allowance.

In accordance with Staff Accounting Bulletin 118 ("SAB 118"), we completed our analysis of the Tax Act resulting in no material adjustments from the provisional amounts recorded during the prior year. The Tax Act did not have a material impact on our financial statements because we are under a full valuation allowance.

Deferred Taxes and Valuation Allowance

The components of the non-current deferred tax assets/(liabilities) were as follows:

	At December 31,
	2018			2017
Gross noncurrent deferred tax assets (liabilities)
Allowance for bad debts	$	4,828		$	3,792
Accrued rent		1,833			1,723
Accrued benefits		-			105
Stock-based compensation		18			387
163J interest limitation		19			-
Depreciation		16,259			15,520
Goodwill		(98	)		594
Other intangibles		211			291
Pension plan liabilities		1,163			1,221
Net operating loss carryforwards		17,927			17,367
AMT credit		424			424
Gross noncurrent deferred tax assets, net		42,584			41,424
Less valuation allowance		(42,160	)		(41,000	)
Noncurrent deferred tax assets, net	$	424		$	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 deferred tax assets except the deferred tax assets for AMT credits which can be realized to offset regular tax liability or refunded. As a result, as of December 31, 2018 and 2017, the Company has recorded a valuation allowance of $42.2 million and $41.0 million, respectively, against its net deferred tax assets. With respect to AMT credit deferred tax asset, it is expected that 50% will be refunded upon the filings of the Company's 2018 federal Corporate income tax return is filed.

As of December 31, 2018, the Company has net operating loss (“NOL”) carryforwards of $60.3 million. Of the $60.3 million NOL carryforwards, $52.7 million will start expiring in 2029 and ending in 2038 if unused. The net operating losses of $7.6 million generated in current year can be carried over indefinitely under the Tax Act. 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, 2018, 2017 and 2016, 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 2014.