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Income Taxes
6 Months Ended
Jul. 31, 2017
Income Tax Disclosure [Abstract]  
Income Taxes

Note 9. Income Taxes

The Company is subject to federal and various state income taxes in the United States as well as other foreign jurisdictions in which it conducts business. Earnings from non-U.S. activities are subject to local country income tax. 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 provision of approximately $90,000 and $165,000 for the three months ended July 31, 2017 and 2016, respectively. The Company recorded a tax provision of approximately $175,000 and $291,000 for the six months ended July 31, 2017 and 2016, respectively, representing effective tax rates of (1.52)% and (1.22)% respectively. The decrease in the provision for income taxes during the three and six months ended July 31, 2017 compared to the three and six months ended July 31, 2016, was primarily due to tax benefits from excess stock-based compensation deductions, partially offset by an increase in the provision for foreign taxes.

The difference between the U.S. federal statutory tax rate of 34% 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. and Canada deferred tax assets offset by foreign tax expense on the Company’s profitable foreign operations.

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 forward for federal purposes and 2009 and forward for California purposes.  There are tax years which remain subject to examination in various other jurisdictions that are not material to the Company's financial statements.