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Income Taxes
3 Months Ended
Apr. 30, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company is subject to federal and various state income taxes in the United States as well as income taxes in foreign jurisdictions in which it conducts business. The Company does not provide for federal income taxes on the undistributed earnings of its foreign subsidiaries as such earnings are reinvested indefinitely.
The Company recorded a tax benefit of approximately $2.1 million for the three months ended April 30, 2021, representing an effective tax rate of 2.02%, which was primarily attributable to a reversal of a U.S. deferred tax liability and excess tax benefits related to stock-based compensation offset by foreign tax expense.
The Company recorded a tax provision of approximately $229,000 for the three months ended April 30, 2020, representing an effective tax rate of (1.57)% which was primarily attributable to foreign tax expense offset by excess benefits related to stock-based compensation.
The difference between the U.S. federal statutory rate of 21% and the Company's effective tax rate in all periods presented is primarily due to a full valuation allowance related to the Company's U.S. deferred tax assets, reversal of a U.S. deferred tax liability as a result of current year intangible amortization and convertible note original issue discount amortization, and foreign expense on the Company's profitable jurisdictions.
The Company's material income tax jurisdictions are the United States (federal) and California. As a result of net operating loss carryforwards, the Company is subject to audits for tax years 2006 and onward for federal purposes and 2009 and onward for California purposes. There are tax years which remain subject to examination in various other state and foreign jurisdictions that are not material to the Company's financial statements.
On March 27, 2020, the President signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES” Act). The CARES Act provides numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of net operating losses, temporary changes to the prior and future limitations on interest deductions, temporary suspension of certain payment requirements for the employer portion of Social Security taxes, technical corrections from prior tax legislation for tax depreciation of certain qualified improvement property, and the creation of certain refundable employee retention credits. The Company does not expect there to be a significant tax impact on its condensed consolidated financial statements at this time and will continue to assess the implications of the CARES Act and its continuing developments and interpretations.