On December 22, 2017, President Donald Trump signed into law “H.R. 1”, formerly known as the “Tax Cuts and Jobs Act” (the “Tax Legislation”). The Tax Legislation, which was effective on January 1, 2018, significantly revises the U.S. tax code by, among other things, lowering the corporate income tax rate from 35% to 21%, limiting deductibility of interest expense, implementing a hybrid-territorial tax system imposing a repatriation tax on deemed repatriated earnings of foreign subsidiaries, and enacted additional international tax provisions, including a minimum tax on global intangible low-taxed income and a new base erosion anti-abuse tax. The Company recorded a provisional non-cash tax benefit of $13,712 in the fourth quarter of 2017. The Company finalized its accounting for the transition tax during the quarter ended March 31, 2018 and has incorporated the impact of the other Tax Legislation provisions effective for 2018 and beyond within the financial statements.



	2019			2018			2017
Current income tax benefit (expense)
State	$	(12	)	$	(118	)	$	(45	)
Foreign	(33		)	(292		)	421
	(45		)	(410		)	376
Deferred income tax benefit (expense)
Federal	(8,302		)	(12,878		)	22,619
State	1,838			(2,851		)	10,282
Foreign	1,494			2,914			2,674
Change in enacted tax rates	—			—			(123,289		)
Net operating loss carryforwards created	68,344			26,058			17,466
	63,374			13,243			(70,248		)
Income tax benefit (expense) before valuation allowances	63,329			12,833			(69,872		)
Deferred tax valuation allowances	(62,759		)	(18,704		)	100,362
Income tax benefit (expense)	$	570		$	(5,871	)	$	30,490

A reconciliation of the reported amount of income tax expense to the amount computed by applying the statutory federal income tax rate to earnings before income taxes from continuing operations is as follows:



	2019			2018			2017
U.S. Federal income tax expense at statutory rates of 21, 21 and 35 percent, respectively	$	(81,724	)	$	(62,619	)	$	38,349
State taxes, net of federal income tax benefit	12,342			1,618			8,160
Tax position on government incentives	127,950			72,244			9,402
Change in enacted tax rates	—			—			(123,289		)
Research & development tax credit	2,703			—			—
Unrecognized tax benefits	(24		)	(272		)	—
Other	2,082			1,862			(2,494		)
Total benefit (expense) for income taxes before valuation allowances	63,329			12,833			(69,872		)
Valuation allowances	(62,759		)	(18,704		)	100,362
Total benefit (expense) for income taxes	$	570		$	(5,871	)	$	30,490

The Company receives government incentive payments and excludes this revenue from federal and state taxable income. This tax position of excluding government incentives from taxable income has been accepted by the Internal Revenue Service for the audit cycle 2010-2011, the results of which were approved by the Joint Committee on Taxation. As a result of excluding these government incentive payments, the Company currently has cumulative losses in recent years and initially established a valuation allowance to reduce its total deferred tax assets to the amount more-likely-than-not to be realized.



	2019			2018
Deferred Tax Assets:
Net operating loss carryforwards	$	348,734		$	278,867
Goodwill	17,028			20,067
Capitalized research and development	—			8,650
Stock-based compensation	3,805			3,447
Interest expense carryforward	4,877			2,940
Tax credit carryforwards	4,330			1,597
Leases	11,364			—
Intangibles	1,530			—
Risk management unrealized loss	131			—
Accrued compensation	4,285			3,318
Inventory capitalization	2,442			1,921
Other	4,589			3,133
Deferred tax assets	403,115			323,940
Deferred Tax Liabilities:
Property, plant and equipment	(41,769		)	(38,324		)
Leases	(9,459		)	—
Convertible debt	(5,213		)	(5,648		)
Risk management unrealized gain	—			(2,649		)
Intangibles	—			949
Prepaid expenses	(2,106		)	(1,688		)
Deferred revenue	—			(583		)
Other	(1,086		)	(773		)
Deferred tax liabilities	(59,633		)	(48,716		)
Net deferred tax assets	343,482			275,224
Valuation allowance	(350,457		)	(283,634		)
Net deferred tax liabilities	$	(6,975	)	$	(8,410	)

At December 31, 2019, the Company has recorded a net deferred tax asset before valuation allowance of $348,734 related to the benefit of federal, state and foreign net operating loss carry-forwards. Federal net operating loss carry-forward totals $1,295,712 and will begin to expire in 2028, while the amount and expiration dates of state net operating losses vary by jurisdiction. Changes in ownership of the Company, as defined by Section 382 of the Internal Revenue Code of 1986, as amended, in any one year may limit the utilization of federal and state net operating losses and credit carry-forwards. The Company has performed an ownership change analysis in 2018 to determine the impact of changes in ownership on utilization of carry-forward attributes, the results of which have been incorporated into our financial statements.

In evaluating available evidence around the recoverability of net deferred tax assets, the Company considers, among other factors, historical financial performance, expectation of future earnings, length of statutory carry-forward periods and ability to carry back losses to prior periods, experience with operating loss and tax credit carry-forwards expiring unused, tax planning strategies and timing for the of reversals of temporary differences. In evaluating losses, management considers the nature, frequency and severity of losses in light of the conditions giving rise to those losses. As a result of the above described tax position of excluding government incentive payments from taxable income, the Company currently has cumulative losses in recent years and has established a valuation allowance to reduce its total deferred tax assets to the amount more-likely-than-not to be realized. Activity regarding the valuation allowance for deferred tax assets was as follows:



	2019			2018			2017
Beginning of year balance	$	283,634		$	265,362		$	365,035
Changes in valuation allowance charged to income	65,284			18,704			36,639
Change in enacted tax rates	—			—			(137,001		)
Foreign currency translation	(164		)	(440		)	689
Change in valuation allowance charged to OCI	(7		)	8			—
Change in valuation allowance charged to equity	1,710			—			—
End of year balance	$	350,457		$	283,634		$	265,362

The Company analyzes filing positions in all of the federal, state and foreign jurisdictions where it is required to file income tax returns, and all open tax years in these jurisdictions to determine if it has any uncertain tax positions on any of its income tax returns. An uncertain tax position represents a tax position taken in a filed tax return or planned to be taken in a tax return not yet filed, that has not been reflected in measuring income tax expense for financial reporting purposes. The Company does not recognize income tax benefits associated with uncertain tax positions where it is determined that it is not more-likely-than-not, based on the technical merits, that the position will be sustained upon examination.



	2019			2018			2017
Beginning of year balance	$	2,028		$	1,771		$	1,900
Increases to tax positions expected to be taken	732			—			—
Increases to tax positions taken during prior years	24			272			—
Decreases to tax positions taken during prior years	—			—			(129		)
Foreign currency translation	(7		)	(15		)	—
End of year balance	$	2,777		$	2,028		$	1,771

The Company recorded an unrecognized tax benefit liability associated with a filing position for a prior year foreign tax return. The amount of unrecognized tax benefits that would affect the effective tax rate if the tax benefits were recognized was $274 at December 31, 2019, $257 at December 31, 2018, and $0 at December 31, 2017. The remaining liability for unrecognized tax benefits is related to tax positions for which there is a related deferred tax asset. The Company does not believe it is reasonably possible that the amounts of unrecognized tax benefits existing as of December 31, 2019 will significantly increase or decrease over the next twelve months. Interest and penalties related to unrecognized tax benefits are recognized as a component of income tax expense. The Company has not recorded any such amounts in the periods presented.

The Company is subject to tax in the U.S. and various state and foreign jurisdictions. The U.S. Internal Revenue Service has examined the Company's federal income tax returns through 2008, as well as 2010 and 2011, while the tax authorities in Germany have examined the Company's corporate income tax returns through 2014. All other years in the U.S. and Germany are subject to examination, while various state and other foreign income tax returns also remain subject to examination by taxing authorities.