
	Fiscal Year Ended
	2019		2020		2021
Current:
State	$	571	$	538	$	442
Foreign	4,214		7,774		8,006
Total	$	4,785	$	8,312	$	8,448
Deferred:
Federal	$	(2,776)	$	(1,559)	$	(218)
State	(920)		(198)		—
Foreign	—		(234)		3,686
Total	$	(3,696)	$	(1,991)	$	3,468
Provision for income taxes	$	1,089	$	6,321	$	11,916


	Fiscal Year Ended
	2019		2020		2021

Tax at federal statutory rate	$	(37,227)	$	(40,880)	$	(56,734)
State tax, net of federal benefit	(469)		210		349
Stock-based compensation expense	(28,437)		(6,683)		(604)
Research and development tax credits	(10,371)		(11,033)		(14,138)
U.S. taxes on foreign income	—		—		14,021
Foreign rate differential	12,299		2,935		2,282
Change in valuation allowance	85,533		61,050		63,146
Foreign on-shoring intellectual property	(20,371)		—		—



Other	132		722		3,594
Provision for income taxes	$	1,089	$	6,321	$	11,916

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. The significant components of our deferred tax assets and liabilities were as follows (in thousands):


	At the End of Fiscal
	2020		2021

Deferred tax assets:
Net operating loss carryforwards	$	232,155	$	308,250
Tax credit carryover	76,209		104,247
Accruals and reserves	11,489		22,263
Deferred revenue	60,473		69,886
Stock-based compensation expense	31,906		28,310
Depreciation and amortization	18,893		120
Charitable contribution carryforwards	2,835		229
Interest expense limitation (163(j))	—		110
ASC 842 lease liabilities	25,197		33,302

Total deferred tax assets	$	459,157	$	566,717
Valuation allowance	(385,791)		(484,437)
Total deferred tax assets, net of valuation allowance	$	73,366	$	82,280
Deferred tax liabilities:
Deferred commissions	$	(30,628)	$	(41,526)
Convertible debt	(11,226)		(8,147)
ASC 842 right-of-use assets	(23,502)		(29,183)
Acquired intangibles and goodwill	(10,421)		(8,727)

Other	(1,729)		(2,230)
Total deferred tax liabilities	$	(77,506)	$	(89,813)
Net deferred tax liabilities	$	(4,140)	$	(7,533)

In June 2019, a three-judge panel from the U.S. Court of Appeals for the Ninth Circuit overturned the U.S. Tax Court's decision in Altera Corp. v. Commissioner and upheld the portion of the Treasury regulations under Section 482 of the Internal Revenue Code that requires related parties in a cost-sharing arrangement to share expenses related to share-based compensation. On July 22, 2019, the taxpayer filed a petition for a rehearing before the full Ninth Circuit and the request was denied on November 12, 2019. On February 10, 2020, the taxpayer filed a petition to appeal the decision to the Supreme Court and on June 22, 2020 the Supreme Court denied the petition. Due to the Ninth Circuit's decision, we adjusted our net operating loss carryforward by $29.7 million in fiscal 2021 to reflect the reduction in losses for fiscal years 2017, 2018 and 2019. We terminated our intercompany cost sharing arrangement at the end of fiscal 2019. There is no impact on our effective tax rate for fiscal 2021 due to our U.S. full valuation allowance against our deferred tax assets.

At the end of fiscal 2021, the undistributed earnings of $82.2 million from non-U.S. operations held by our foreign subsidiaries are designated as permanently reinvested outside the U.S. Accordingly, no additional U.S. income taxes or additional foreign withholding taxes have been provided thereon. Determination of the amount of unrecognized deferred tax liability related to these earnings is not practicable.

At the end of fiscal 2021, we had net operating loss carryforwards for federal income tax purposes of approximately $1,278.0 million and state income tax purposes of approximately $645.8 million. These net operating loss carryforwards will expire, if not utilized, beginning in 2028 for federal and state income tax purposes.

We had federal and state research and development tax credit carryforwards of approximately $75.6 million and $67.6 million at the end of fiscal 2021. The federal research and development tax credit carryforwards will expire commencing in 2028, while the state research and development tax credit carryforwards have no expiration date.

Realization of deferred tax assets is dependent on future taxable income, the existence and timing of which is uncertain. Based on our history of losses, management has determined that it is more likely than not that the U.S. deferred tax assets will not be realized, and accordingly has placed a full valuation allowance on the net U.S. deferred tax assets. The valuation allowance increased by $78.3 million and $98.6 million, respectively, during fiscal 2020 and 2021.

Utilization of the net operating loss carryforwards and credits may be subject to substantial annual limitation due to the ownership change limitations provided by Section 382 of the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization. In January 2021, we completed an analysis through the end of fiscal 2021 to evaluate whether there are any limitations of our net operating loss carryforwards and concluded that there was not a limitation that would result in the permanent expiration of carryforwards before they are utilized.

In March 2020, the “Coronavirus Aid, Relief and Economic Security (CARES) Act” was signed into law. The Act includes provisions relating to deferment of the employer portion of certain payroll taxes and permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. The Company has determined that the NOL provisions will not impact the Company since the Company has been generating losses. The CARES Act allowed for the deferral of payment on the Company’s share of the 6.2% Social Security tax on certain wages paid in fiscal year 2021. Deferred amounts totaling $9.0 million will be due on December 31, 2021, and the remainder of $9.0 million due on December 31, 2022.


	Fiscal Year Ended
	2019		2020		2021
Gross unrecognized tax benefits—beginning balance	$	12,401	$	18,891	$	28,570
Decreases related to tax positions taken during prior years	(845)		(34)		(345)
Increases related to tax positions taken during prior years	—		408		1,881

Increases related to tax positions taken during current year	7,335		9,305		9,465
Gross unrecognized tax benefits—ending balance	$	18,891	$	28,570	$	39,571

It is difficult to predict the final timing and resolution of any particular uncertain tax position. Based on our assessment, including experience and complex judgments about future events, we do not expect that changes in the liability for unrecognized tax benefits during the next twelve months will have a significant impact on our consolidated financial position or results of operations.

We file income tax returns in the U.S. federal jurisdiction as well as many U.S. states and foreign jurisdictions. The tax returns for fiscal years 2009 and forward remain open to examination by the major jurisdictions in which we are subject to tax. The tax returns for fiscal years outside the normal statutes of limitation remain open to audit by tax authorities due to tax attributes generated in those early years, which have been carried forward and may be audited in subsequent years when utilized.