On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (Tax Act). The Tax Act reduced the U.S. statutory corporate tax rate to 21%, effective January 1, 2018. Consequently, we recorded a decrease to our federal deferred tax assets of $22.0 million, which was fully offset by a reduction in our valuation allowance for the year ended December 31, 2017.


	December 31,
	2019		2018		2017
Current expense (benefit):
Federal	$	—	$	—	$	—
State	—		—		—
Foreign	68		80		—
Total current tax expense (benefit)	68		80		—

Deferred expense (benefit):
Federal	—		—		—
State	—		—		—
Foreign	(3)		(36)		—
Total deferred tax expense (benefit)	(3)		(36)		—

Total Tax Expense (benefit)	$	65	$	44	$	—

The following table presents a reconciliation of the tax expense computed at the statutory federal rate and the Company’s tax expense for the period presented (in thousands):


	December 31,
	2019		2018		2017
Tax at statutory federal rate	$	(11,446)	$	(10,570)	$	(10,143)
Stock-based compensation	(5,560)		(8,557)		(7,634)
Meals and Entertainment	409		309		198
Other	614		148		(145)
Tax credits	(1,128)		(1,015)		(644)
2017 Tax Act	—		44		21,969
Change in valuation allowance	17,176		19,685		(3,601)
Provision for income taxes	$	65	$	44	$	—

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.


	December 31,
	2019		2018
Deferred tax assets:
Net operating loss carryforwards	$	64,648	$	50,601
Tax credit carryforwards	5,601		4,287
Share-based compensation	5,932		3,149
Allowances and other	11,443		8,827
Lease obligation	23,869		—
Total deferred tax assets	111,493		66,864
Valuation allowance	(88,433)		(66,435)
Net deferred tax assets	23,060		429

Deferred Tax Liabilities:
Depreciation and Amortization	(850)		(388)
Right of use asset	(22,171)		—
Total deferred tax liability	(23,021)		(388)
Total deferred tax assets	$	39	$	41

Due to the uncertainties surrounding the realization of deferred tax assets through future taxable income, the Company has provided a full valuation allowance against its U.S. deferred tax assets, and, therefore, no benefit has been recognized for the net operating loss carryforwards and other deferred tax assets. The U.S. valuation allowance increased by $22.0 million and $22.1 million for the years ended December 31, 2019 and December 31, 2018, respectively. The current year change in the U.S. valuation allowance is primarily related to the increase in net operating loss carryforwards generated during the year. The Company recorded an immaterial deferred tax asset related to the Company’s foreign operations in the United Kingdom.

The valuation allowance for deferred tax assets consisted of the following activity for the years ended December 31, 2019, 2018 and 2017 (in thousands):


	Balance at beginning of year		Additions		Deductions		Balance at end of year
Year Ended December 31, 2017	$	44,861	$	—	$	540	$	44,321
Year Ended December 31, 2018	44,321		22,114		—		66,435
Year Ended December 31, 2019	$	66,435	$	21,998	$	—	$	88,433

As of December 31, 2019, the Company had approximately $259.9 million of federal and $153.8 million of state net operating loss carryforwards available to offset future taxable income which expires in varying amounts beginning in 2027 and

2019 respectively. The Tax Act changed the federal rules governing net operating loss carryforwards. For net operating loss carryforwards arising in tax years beginning after December 31, 2017, the Tax Act limits a taxpayer’s ability to utilize such carryforwards to 80% of taxable income. In addition, net operating loss carryforwards arising in tax years ending after December 31, 2017 can be carried forward indefinitely, but carryback is generally prohibited. Net operating loss carryforwards generated before January 1, 2018 will not be subject to the Tax Act’s taxable income limitation and will continue to have a twenty-year carryforward period.

As of December 31, 2019, the Company had tax credit carryforwards of approximately $5.1 million, and $2.7 million available to reduce future taxable income, if any, for both federal and state purposes, respectively. The federal tax credit carryforwards expire beginning in 2028 and the state tax credits can be carried forward indefinitely.

Section 382 of the Internal Revenue Code, and similar state provisions, limits the use of net operating loss and tax credit carryforwards in certain situations where equity transactions result in a change of ownership as defined by Internal Revenue Code Section 382. In the event the Company should experience an ownership change, as defined, utilization of its net operating loss carryforwards and tax credits could be limited.


	Year Ended December 31,
	2019		2018		2017
Balance at beginning of year	$	1,459	$	943	$	616
Additions for tax positions taken in current year	383		441		328
Increases in balance related to prior year tax positions	—		75		—
Decreases in balances related to prior year tax position	—		—		(1)
Balance at end of year	$	1,842	$	1,459	$	943

The total amount of gross unrecognized tax benefits was $1.8 million, $1.5 million, and $0.9 million as of December 31, 2019, 2018, and 2017 respectively. None of the Company’s unrecognized tax benefits that, if recognized, would affect its effective tax rate. The Company does not anticipate the total amounts of unrecognized tax benefits will significantly increase or decrease in the next 12 months. The Company’s policy is to include interest and penalties related to unrecognized tax benefits within the provision for taxes. Management determined that no accrual for interest or penalties was required as of December 31, 2019, 2018 and 2017.