10. Income Taxes

Income (loss) before the provision for income taxes consists of the following:


	Year Ended December 31,
	2014		2013			2012
Domestic	$	(17,492)	$	(10,740	)	$	(18,139	)
Foreign		859		710			2,198
Total	$	(16,633)	$	(10,030	)	$	(15,941	)

The provision for (benefit from) income taxes in the accompanying consolidated financial statements consists of the following:


	Year Ended December 31,
	2014		2013		2012
Current provision:
Federal	$	—	$	—	$	—
State		41		22		16
Foreign		219		128		95
Total current		260		150		111
Deferred (benefit):
Federal		—		—		(2,937	)
State		—		—		(470	)
Foreign		—		62		(193	)
Total deferred		—		62		(3,600	)
Total provision (benefit)	$	260	$	212	$	(3,489	)

A reconciliation of the U.S. federal statutory rate to the Company's effective tax rate is as follows:


	Year Ended December 31,
	2014			2013			2012
Tax at statutory rates		(34.0)	%		(34.0	)%		(34.0	)%
State income taxes		(2.0)			(3.3	)		(3.4	)
Change in tax rate		(1.6)			5.0			0.4
Permanent differences		16.2			(11.7	)		9.6
Foreign rate differential		(0.4)			(0.4	)		0.3
Research and development credits		(7.9)			(9.5	)		—
Change in valuation allowance		31.2			56.0			5.2
Other, net		0.1			—			—
Effective tax rate		1.6	%		2.1	%		(21.9	)%

The approximate income tax effect of each type of temporary difference and carryforward as of December 31, 2014 and 2013 is as follows:


	As of December 31,
	2014			2013
Net operating loss carry-forwards	$	42,633	$	30,763
Tax credit carry-forwards		6,482		5,211
Stock-based compensation		2,608		3,502
Intangible assets		(6,600)		(3,469	)
Fixed assets		246		85
Account receivable reserves		970		966
Accrued compensation		1,463		53
Capitalized research and development costs		—		47
Capitalized start-up costs		420		481
Other temporary differences		(334)		1,121
Deferred tax assets		47,888		38,760
Valuation allowance		(47,779)		(38,635	)
Net deferred tax assets	$	109	$	125

The Company is required to compute income tax expense in each jurisdiction in which it operates. This process requires the Company to project its current tax liability and estimate its deferred tax assets and liabilities, including net operating loss (NOL) and tax credit carry-forwards. In assessing the ability to realize the net deferred tax assets, management considers whether it is more likely than not that some portion or all of the net deferred tax assets will not be realized.

Upon the closing of the Zencoder acquisition, the Company assumed $3.4 million of net deferred tax liabilities which created a future source of taxable income for which the Company's net deferred tax assets can be realized and as a result the Company reduced the valuation allowance by approximately $3.4 million during the year ended December 31, 2012. The Company has provided a valuation allowance against its remaining U.S. net deferred tax assets as of December 31, 2014 and 2013, as based upon the level of historical U.S. losses and future projections over the period in which the net deferred tax assets are deductible, at this time, management believes it is more likely than not that the Company will not realize the benefits of these deductible differences. The increase in the valuation allowance from 2013 to 2014 principally relates to the current year taxable loss.

The Company has historically provided a valuation allowance against its net deferred tax assets in Japan. Based upon the level of historical income in Japan and future projections, the Company determined in the fourth quarter of 2012 that it was probable it will realize the benefits of its future deductible differences. As such, the Company released the valuation allowance related to the remaining deferred tax assets in Japan and recorded a $193 income tax benefit in the consolidated statement of operations for the year ended December 31, 2012. In 2014 a portion of the Company's profits in Japan were offset by losses in Japan. Accordingly, the Company's deferred tax asset in Japan decreased in 2014.

As of December 31, 2014, the Company had federal and state net operating losses of approximately $132.6 million and $63.8 million, respectively, which are available to offset future taxable income, if any, through 2034. Included in the federal and state net operating losses are deductions attributable to excess tax benefits from the exercise of non-qualified stock options of $12.1 million and $7.7 million, respectively. The tax benefits attributable to these net operating losses are credited directly to additional paid-in capital when realized. The Company also had federal and state research and development tax credits of $4.6 million and $2.8 million, respectively, which expire in various amounts through 2034. The net operating loss and tax credit amounts are subject to annual limitations under Section 382 change of ownership rules under the U.S. Internal Revenue Code of 1986, as amended. Through June 30, 2014, the Company completed an assessment to determine whether there may have been a Section 382 ownership change and determined that it is more-likely-than-not that the Company's net operating and tax credit amounts as disclosed are not subject to any material Section 382 limitations.

On January 1, 2009, the Company adopted the provision for uncertain tax positions under ASC 740, Income Taxes. The adoption did not have an impact on the Company's retained earnings balance. At December 31, 2014 and 2013, the Company had no recorded liabilities for uncertain tax positions.

At December 31, 2014 and 2013, the Company had no accrued interest or penalties related to uncertain tax positions.

The Company files income tax returns in the U.S. federal tax jurisdiction, various state and various foreign jurisdictions. Since the Company is in a loss carryforward position, the Company is generally subject to examination by the U.S. federal, state and local income tax authorities for all tax years in which a loss carryforward is available.

The Company's current intention is to reinvest the total amount of its unremitted earnings in the local international tax jurisdiction or to repatriate the earnings only when tax effective. As such, the Company has not provided for U.S. taxes on the unremitted earnings of its international subsidiaries. Upon repatriation of those earnings, in the form of dividends or otherwise, the Company may be subject to U.S. income taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable to the various foreign countries. Determination of the amount of the unrecognized deferred U.S. income tax liability is not practical due to the complexity associated with this hypothetical calculation.