Note 14. Income Taxes

The components of loss from continuing operations before income taxes were generated substantially in the United States. As a result of the Company’s history of net operating losses and full valuation allowance against its deferred tax assets, only the timing differences attributable to the treatment of the amortization of tax deductible goodwill is reflected in the income tax provision for the years ended December 31, 2016, 2015 and 2014. In addition for the year ended December 31, 2015 the income tax provision was partially offset by an income tax benefit that was realized as a result of acquisition activity.

Reconciliations of the statutory federal income tax rate and the Company’s effective tax rate consist of the following (in thousands):


	Year Ended
	December 31,
	2016		2015		2014
Tax at federal statutory rate	$	(25,797)	$	(19,715)	$	(5,661)
State and local tax		(1,133)		(3,189)		(916)
Non-deductible stock compensation		1,291		688		210
Non-deductible expenses		382		158		87
Benefit due to tax rate change		(89)		—		—
Change in valuation allowance		25,856		22,094		6,668
Income tax provision	$	510	$	36	$	388

Significant components of the Company’s deferred tax assets and liabilities were as follows (in thousands):


	As of
	December 31,
	2016		2015
Deferred tax assets (liabilities):
Net operating loss carryforwards	$	70,247	$	47,053
Accrued expenses		1,088		926
Stock-based compensation		2,238		451
Amortization of debt restructure cost		2,718		—
Amortization of intangible assets		(6,908)		(3,072)
Depreciation of property and equipment		(28)		(152)
Valuation allowance		(71,202)		(46,477)
Other		153		86
Net deferred tax assets (liabilities)	$	(1,694)	$	(1,185)

The Company has provided a full valuation allowance for its deferred tax assets at December 31, 2016 and 2015, due to the uncertainty surrounding the future realization of such assets. Therefore, no benefit has been recognized for the net operating loss carryforwards and other deferred tax assets.

The valuation allowance increased by $24.7 million, $24.1 million and $6.7 million during the years ended December 31, 2016, 2015 and 2014, respectively. For the year ended December 31, 2016, the valuation allowance included an increase of approximately $1.7 million associated with acquisition activity and a decrease of $3.3 million resulting from a tax rate change.

As of December 31, 2016, the Company had approximately $192.3 million of federal and state net operating loss carryforwards available to offset future taxable income. If not utilized, the federal net operating loss carryforwards begin to expire in 2025. The deferred tax asset related to its net operating losses include no excess tax benefit of stock option exercises, which, when realized, will be recorded as a credit to additional paid‑in capital.

The Company’s ability to utilize the net operating loss and tax credit carryforwards in the future may be subject to substantial restrictions in the event of past or future ownership changes as defined in Section 382 of the U.S. Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). In the event the Company should experience an ownership change, as defined in the Internal Revenue Code, utilization of its net operating loss carryforwards and tax credits could be limited.

The Company has previously recorded an uncertain tax position of $2.3 million during the year ended December 31, 2013. There were no uncertain tax positions recorded in 2016, 2015 and 2014. The Company has recognized $0.1 million of interest expense in both of the years ended December 31, 2016 and 2015 related to unrealized tax benefits. At December 31, 2016 and 2015, the Company had a liability for the payment of interest and penalties of approximately $0.7 million and $0.6 million, respectively, related to unrecognized tax benefits.

The Company does not anticipate that the total amounts of unrecognized tax benefits will significantly increase or decrease in the next 12 months.

The Company’s tax jurisdiction is the United States. The Company’s 2013 through 2016 tax years are open to examination by U.S. federal and state tax authorities.