9. Income Taxes

A reconciliation of income taxes computed at federal statutory rates to income tax expense is as follows (dollar amounts in thousands):


	Three Months Ended June 30,
	2018					2017
Provision (benefit) for income taxes at statutory rate	$	414		21.0	%	$	(534	)	35.0	%
State and local income taxes, net of federal tax benefit		26		1.3	%		(41	)	2.7	%
Stock based compensation		6		0.3	%		(56	)	3.7	%
Foreign rate differential		790		40.1	%		17		(1.0	)%
Research credits		(6	)	(0.3	)%		152		(10.0	)%
Permanent non-deductible acquisition-related expense		60		3.1	%		(657	)	43.1	%
Net (windfall) shortfall on stock based compensation		(39	)	(1.9	)%		71		(4.7	)%
Other, net		23		1.1	%		21		(1.4	)%

Reported income tax provision (benefit)	$	1,274		64.7	%	$	(1,027	)	67.4	%


	Six Months Ended June 30,
	2018					2017
(Benefit) for income taxes at statutory rate	$	(356	)	21.0	%	$	(945	)	35.0	%
State and local income taxes, net of federal tax benefit		(51	)	3.0	%		(61	)	2.3	%
Stock based compensation		(16	)	0.9	%		(76	)	2.8	%
Foreign rate differential		(448	)	26.4	%		62		(2.3	)%
Research credits		13		(0.7	)%		211		(7.8	)%
Permanent non-deductible acquisition-related expense		(241	)	14.2	%		(902	)	33.4	%
Net (windfall) shortfall on stock based compensation		(156	)	9.2	%		542		(20.1	)%
Other, net		64		(3.7	)%		41		(1.5	)%

Reported income tax (benefit)	$	(1,191	)	70.3	%	$	(1,128	)	41.8	%

At June 30, 2018, the reserve for uncertain tax positions was approximately $7.4 million. Of this amount, $4.6 million is recorded as a reduction of deferred tax assets and $2.8 million is classified as long-term liabilities.

As disclosed in the Company’s 2017 Form 10-K, the Company recorded the tax effects of the 2017 Tax Cuts and Jobs Act (“The Act”) in the consolidated financial statements for the year ended December 31, 2017. The new legislation required the Company to pay tax on the unremitted earnings of its foreign subsidiaries through December 31, 2017. Because of the complexities involved in determining the previously unremitted earnings and profits of all our foreign subsidiaries, the Company is still in the process of obtaining, preparing, and analyzing the required information, as permitted in accordance with Staff Accounting Bulletin No. 118. The Company recorded an initial estimate of the tax on unremitted earnings of approximately $0.2 million; however, this amount was offset by available foreign tax credits, and as a result the net estimated amount payable related to the deemed repatriation of foreign earnings was zero. The Company is continuing to update this estimate, including updating the cumulative unremitted earnings of the foreign subsidiaries and related foreign taxes paid, but does not expect there to be a material change in the estimate once it is finalized.