INCOME TAXES

The Tax Cuts and Jobs Act of 2017 ("2017 Tax Act") was signed into law on December 22, 2017. The 2017 Tax Act significantly revised the U.S. corporate income tax by, among other things, lowering the statutory corporate tax rate from 35% to 21%, eliminating certain deductions, imposing a mandatory one-time tax on accumulated earnings of foreign subsidiaries, introducing new tax regimes, and changing how foreign earnings are subject to U.S. tax. The 2017 Tax Act also enhanced and extended through 2026 the option to claim accelerated depreciation deductions on qualified property. We have completed our determination of the accounting implications of the 2017 Tax Act on our tax accruals.

The significant components of our income tax (benefit) expense attributable to current operations for the periods stated were as follows:



	For the Year Ended December 31,
(Dollars in thousands)	2019			2018			2017
(Loss) income before income tax (benefit) expense	$	(13,423	)	$	(2,185	)	$	11,559
Current:
Federal tax	$	—		$	—		$	199
State tax	582			838			1,006
Foreign tax	13			148			270
Total current	595			986			1,475
Deferred:
Federal tax	(2,121		)	(1,467		)	26,348
State tax	(1,239		)	(532		)	(787		)
Foreign tax	107			307			(171		)
Total deferred	(3,253		)	(1,692		)	25,390
Total income tax (benefit) expense	$	(2,658	)	$	(706	)	$	26,865

Foreign income before income tax (benefit) expense is immaterial to consolidated income before income tax (benefit) expense.

The following table summarizes the principal elements of the difference between the United States Federal statutory rate of 21% and our effective tax rate:



Effective tax rate reconciliation	2019					2018					2017
(Dollars in thousands)
(Loss) income before income tax (benefit) expense	$	(13,423	)			$	(2,185	)			$	11,559
Income taxes computed at the Federal statutory rate	$	(2,819	)	21.0	%	$	(459	)	21.0	%	$	4,046		35.0	%
State income taxes, net of Federal benefit	(567		)	4.2	%	306			(14.0	)%	472			4.1	%
Goodwill impairment	2,243			(16.7	)%	—			—	%	—			—	%
Impact of 2017 Tax Act	—			—	%	—			—	%	24,235			209.7	%
Research and development and other tax credits	(1,790		)	13.3	%	(1,144		)	52.4	%	(1,775		)	(15.4	)%
Excess executive compensation	322			(2.4	)%	281			(12.9	)%	—			—	%
Other	(47		)	0.4	%	310			(14.2	)%	(113		)	(1.0	)%
(Benefit from) provision for income taxes	$	(2,658	)	19.8	%	$	(706	)	32.3	%	$	26,865		232.4	%

The anticipated effective income tax rate is expected to continue to differ from the Federal statutory rate primarily due to the effect of state income taxes, the benefit of the research and development tax credit, permanent differences between book and taxable income and certain discrete items. The earnings of non-U.S. subsidiaries are deemed to be indefinitely reinvested in non-U.S. operations.

The components of deferred income tax assets at December 31, 2019 and 2018 were as follows:



	December 31,
(Dollars in thousands)	2019				2018
Capitalized research and development costs	$	18,605			$	14,219
Net operating loss carryforward	15,978				18,851
Property and equipment	6,092				5,969
Accrued liabilities, reserves and other expenses	3,718				3,837
Research and development credits	4,140				2,360
Tax credits	1,467				2,141
Stock based compensation	1,600			12	1,739
Other	121				200
Gross deferred income tax assets	51,721				49,316
Deferred income tax liabilities:
Intangible assets	(2,430		)		(2,711		)
Prepaid and other expenses	(308		)		(121		)
Gross deferred income tax liabilities	$	(2,738	)		$	(2,832	)
Net deferred income tax assets	$	48,983			$	46,484

Net Operating Losses

As of December 31, 2019, we had approximately $71.2 million of NOLs available to offset future taxable income. The Federal NOLs begin expiring in 2026 and will fully expire in 2029. We have an immaterial amount of foreign NOLs and tax credits available for future use.

Valuation Allowance

We assess the recoverability of our deferred income tax assets, which represent the tax benefits of future tax deductions, NOLs and tax credits, by considering the adequacy of future taxable income from all sources, including prudent and feasible tax planning strategies. This assessment is required to determine whether based on all available evidence, it is “more likely than not” (which means a probability of greater than 50%) that all or some portion of the DTAs will be realized in future periods. As of December 31, 2019 and 2018, we believe it is more likely than not that our DTAs will be realized in future periods and thus did not have a valuation allowance.

Income Tax Audits

The 2017, 2018 and 2019 Federal and state income tax returns are within the statute of limitations (“SOL”) and are currently not under examination by any Federal or state tax authority.

We operate in all states and the District of Columbia and are subject to various state income and franchise tax audits. The states’ SOL varies from three to four years from the later of the due date of the return or the date filed. We usually file our Federal and all state and local income tax returns on or before September 15 of the following year; therefore, the SOL for those states with a three-year SOL is open for calendar years ending 2016 through 2019, and for the four-year SOL states, the SOL is open for years ending from 2015 through 2019.