14.Income Taxes

The following table presents the components of our consolidated income tax (benefit) expense for the years ended December 31, 2019, 2018 and 2017:


	Current		Deferred		Total
Year ended December 31, 2019
U.S. Federal	$	—	$	—	$	—
State and local		716	$	104	$	820
Foreign		1,081		(33)		1,048
	$	1,797	$	71	$	1,868
Year ended December 31, 2018
U.S. Federal	$	(12)	$	(12,664)	$	(12,676)
State and local		183	$	(471)	$	(288)
Foreign		731		—		731
	$	902	$	(13,135)	$	(12,233)
Year ended December 31, 2017
U.S. Federal (a)	$	(780)	$	(3,986)	$	(4,766)
State and local		550		(180)		370
Foreign		(145)		—		(145)
	$	(375)	$	(4,166)	$	(4,541)

(a)

Includes a $5.9 million net benefit recorded in the fourth quarter of 2017 resulting from the enactment of the Act on December 22, 2017.

The Company’s income tax provision reconciles to the provision at the statutory U.S. federal income tax rate for each year ended December 31, as follows:


	2019			2018			2017
Statutory amount (computed at 21% in 2019 and 2018 and 35% in 2017)	$	(733)		$	(22,398)		$	(1,449)
Re-measurement of deferred tax assets (a)		—			—			(7,451)
Valuation allowance on foreign tax credits (a)		1,081			593			1,514
State income tax, net of federal benefit		991			(1,922)			168
Permanent differences, other		461			1,550			505
Permanent differences, incentive stock options		311			(24)			447
Valuation allowance, other		(166)			10,384			(77)
Uncertain tax provision		—			—			1,614
Other		(77)			(416)			188
Consolidated income tax provision	$	1,868		$	(12,233)		$	(4,541)
Consolidated effective tax rate		(53.5)	%		11.5	%		109.7	%

(a)

In 2017, represents impact resulting from the enactment of the Act on December 22, 2017.

In the year ended 2019, the Company’s effective tax rate differed from the statutory rate of 21% primarily due to the recording of an additional valuation allowance to offset net operating loss carryforwards and foreign tax credits generated during the period, foreign taxes, state income taxes and the non-deductibility of certain permanent items.

In the year ended 2018, the Company’s effective tax rate differed from the statutory rate of 21% primarily due to recording an $11.0 million, or $0.39 per share, valuation allowance against the Company’s net deferred tax assets, including net operating losses and foreign tax credits. The Company also recorded tax expense of $1.2 million related to the $69.5 million goodwill impairment. Additionally, the Company recorded tax expense related to permanent differences from meals and entertainment.

In the year ended 2017, the Company’s effective tax rate differed from the statutory rate of 35% primarily due to the impact of the Act enacted on December 22, 2017. We recorded a net tax benefit of $5.9 million, or $0.21 per share, resulting from the re-measurement of the Company’s net deferred tax liabilities to reflect the new, lower U.S. corporate income tax rate of 21%, partially offset by the addition of a partial valuation allowance recorded against existing foreign tax credit carryforwards not expected to be utilized in future tax years. This net tax benefit was partially offset by the addition of an uncertain tax position reserve as well as tax expense for permanent differences associated with incentive stock options and meals and entertainment.

Deferred Taxes

The Company’s deferred tax assets and liabilities are as follows:


	Long Term
	As of December 31,
	2019		2018
Assets related to:
Accrued liabilities	$	1,030	$	1,105
Intangible assets		3,020		3,054
Net operating loss carryforward		15,246		15,970
Non-qualified stock options		586		672
Foreign tax credits		2,570		1,489
Goodwill		7,232		8,200
Leases		9,038		—
Other		1,347		2,684
Total gross deferred tax assets		40,069		33,174
Less valuation allowance		(16,960)		(15,815)
Total net deferred tax assets		23,109		17,359
Liabilities related to:
Depreciation and amortization		(22,634)		(16,974)
Other		(595)		(434)
Total deferred tax liabilities		(23,229)		(17,408)
Net deferred tax liabilities	$	(120)	$	(49)

The Company has net operating loss carryforwards for federal income tax purposes of $44.1 million as of December 31, 2019, which are available to reduce future taxable income. The amount of net operating loss that arose before the 2018 tax year is $7.5 million. These net operating losses will expire beginning 2032 and continuing through 2037. In addition, the Company has $36.6 million of net operating losses that arose after the 2017 tax year. These carryforwards last for an indefinite period of time but are limited to offset 80% of taxable income in any given year.

The Company assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. The Company considers the scheduled reversal of deferred tax liabilities, available carryback periods, and tax-planning strategies in making this assessment. According to ASC subtopic 740‑10, the Company’s three-year cumulative loss is a significant piece of objective evidence. This objective evidence is weighed more heavily than the Company’s subjective positive evidence such as our estimated future taxable income and growth. Therefore, as of December 31, 2019, the Company continued to maintain a valuation allowance of $17.0 million. This includes an increase of $1.1 million during the year ended December 31, 2019 primarily to offset the value of additional foreign tax credits generated during the year.

Uncertain Tax Benefits

The Company and its subsidiaries file consolidated federal income tax returns in the United States and also file in various states. With few exceptions, the Company remains subject to federal and state income tax examinations for the years of 2013-2019. As of December 31, 2019, the Company has recorded unrecognized tax benefits of $1.6 million for any uncertain tax positions. The Company does not expect that unrecognized tax benefits as of December 31, 2019 for certain federal income tax matters will significantly change over the next 12 months. The final outcome of these uncertain tax positions is not yet determinable. Our uncertain tax benefits, if recognized, would affect the Company’s effective tax rate. The change in the total gross unrecognized tax benefits and prior year audit resolutions of the Company during the years ended December 31, 2019 and 2018 are reconciled in the table below:


	2019		2018
Balances at beginning of the year	$	1,614	$	1,614
Additions based on tax position related to current year		—		—
Additions based on tax positions related to prior years		—		—
Reductions based on tax positions related to current year		—		—
Reductions based on tax positions related to prior years		—		—
Settlements with tax authorities		—		—
Lapse of statute of limitations		—		—
Balance at the end of year	$	1,614	$	1,614

The Company’s policy is to recognize interest and penalties related to any unrecognized tax liabilities as additional tax expense. No interest or penalties have been accrued at December 31, 2019, 2018 and 2017. The Company believes it has appropriate and adequate support for the income tax positions taken and to be taken on its tax returns and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter. Although the Company believes its recorded assets and liabilities are reasonable, tax regulations are subject to interpretation and tax litigation is inherently uncertain; therefore the Company’s assessments can involve both a series of complex judgments about future events and rely heavily on estimates and assumptions. Although the Company believes that the estimates and assumptions supporting its assessments are reasonable, the final determination of tax audit settlements and any related litigation could be materially different from that which is reflected in historical income tax provisions and recorded assets and liabilities. If the Company were to settle an audit or a matter under litigation, it could have a material effect on the income tax provision, net income, or cash flows in the period or periods for which that determination is made. Any accruals for tax contingencies are provided for in accordance with U.S. GAAP.

The Company does not believe that its tax positions will significantly change due to any settlement and/or expiration of statutes of limitations prior to December 31, 2020.