Deferred income taxes reflect the net effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. The components of our deferred tax assets and liabilities are as follows (in thousands):


	October 2, 2020		September 27, 2019
Deferred tax assets:
Net operating loss and credit carryforward	$	278,418	$	263,199
Intangible assets	15,880		9,887
Property and equipment	3,274		—
Accrued expenses	14,564		16,149
Minority equity investments	1,010		784
Lease obligations	12,732		—
Interest	5,471		7,170
Gross deferred tax asset	331,349		297,189
Less valuation allowance	(277,442)		(252,536)
Deferred tax asset, net of valuation allowance	$	53,907	$	44,653

Deferred tax liabilities:
Property and equipment	$	—	$	(1,473)
Right of use lease asset	$	(14,057)	$	—
Deferred tax liabilities	$	(14,057)	$	(1,473)
Net deferred tax asset	$	39,850	$	43,180

As of October 2, 2020, we had $908.0 million of gross federal net operating loss (“NOL”) carryforwards, primarily related to acquisitions made in prior fiscal years. The federal NOL carryforwards will expire at various dates through 2038 for losses generated prior to the tax period ended September 27, 2019. For losses generated during the tax period ended September 27, 2019 and future years, the NOL carryforward period is infinite. The reported net operating loss carryforward includes any limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, which applies to an ownership change as defined under Section 382.


	Fiscal Years
	2020		2019		2018
United States	$	(65,915)	$	(458,617)	$	(145,851)
Foreign	24,353		35,464		(9,384)
(Loss) income from operations before income taxes	$	(41,562)	$	(423,153)	$	(155,235)


	Fiscal Years
	2020		2019		2018
Current:
Federal	$	(834)	$	70	$	(6,876)
State	48		36		(160)
Foreign	1,958		876		1,642
Current provision (benefit)	1,172		982		(5,394)
Deferred:
Federal	(8,635)		(21,560)		75,428
State	(22,613)		12,907		(15,526)
Foreign	9,686		(41,108)		(24,652)
Change in valuation allowance	24,906		9,424		(51,329)
Deferred provision (benefit)	3,344		(40,337)		(16,079)
Total provision (benefit)	$	4,516	$	(39,355)	$	(21,473)

We recognize deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. In making this determination, we consider available positive and negative evidence and factors that may impact the valuation of our deferred tax asset including results of recent operations, future reversals of existing taxable temporary differences, projected future taxable income, and tax-planning strategies. We have significant negative objective evidence in the form of adjusted cumulative losses in the U.S. over the three-year period ended October 2, 2020 that resulted in our continued determination that there was not sufficient objectively verifiable positive evidence to offset this negative objective evidence and we concluded that a full valuation allowance was still appropriate for our U.S. deferred tax assets.

The $277.4 million of valuation allowance as of October 2, 2020 relates primarily to federal and state NOLs, tax credit carryforwards and a partial valuation allowance on tax credits in Canada of $8.0 million whose recovery is not considered more likely than not. The $252.5 million of valuation allowance as of September 27, 2019 related primarily to federal and state NOLs, tax credit carryforwards and a partial valuation allowance on tax credits in Canada of $19.0 million, for which recovery is not considered likely. The change during the fiscal year ended October 2, 2020 of $24.9 million primarily relates to an increase in our state NOLs and an increase in our federal and state tax credits.


	Fiscal Years
	2020	2019	2018
Federal statutory rate	21.0%	21.0%	24.5%
Change in valuation allowance	(60.5)	(2.4)	34.0
Provision to return adjustments	25.4	0.3	8.3
Research and development credits	20.7	1.4	9.0
Global Intangible Low Taxed Income	(11.4)	(2.9)	—
Foreign rate differential	9.1	1.6	5.1
Warrant liability	(6.5)	—	4.4
Intra-entity license transfer	(4.6)	9.4	—
Nondeductible compensation expense	(4.1)	(0.6)	1.4
State taxes net of federal benefit	0.9	0.9	0.8
Section 382 adjustment	—	(19.3)	—
Nondeductible legal fees	—	—	0.9
2017 tax reform	—	—	(73.7)
Other permanent differences	(0.9)	(0.1)	(0.9)
Effective income tax rate	(10.9)%	9.3%	13.8%

For fiscal years 2020, 2019 and 2018, the effective tax rates on $41.6 million, $423.2 million and $155.2 million, respectively, of pre-tax loss from continuing operations were (10.9)%, 9.3% and 13.8%, respectively. The effective income tax rates for fiscal years 2020, 2019 and 2018 were impacted by a lower income tax rate in many foreign jurisdictions in which our foreign subsidiaries operate, changes in valuation allowance, research and development tax credits, and a fair market value adjustment of warrant liability. For fiscal year 2020, the effective tax rate was also impacted by an adjustment in our Section 382 limitation which increased our

California NOL carryforwards and the inclusion of Global Intangible Low Taxed Income. For fiscal year 2019, the effective tax rate was also impacted by a change in our NOL carryforward due to an adjustment in our Section 382 limitation from a prior period acquisition and the immediate recognition of the current and deferred income tax effects totaling $39.8 million from an intra-entity transfer of a license for intellectual property to a higher taxed jurisdiction that received a tax basis step-up. For fiscal year 2018, the effective tax rate was also impacted by the Tax Cuts and Jobs Act (the “Tax Act”).

On March 27, 2020, the U.S. Congress enacted the Coronavirus Aid Relief & Economic Security Act (“CARES Act”). The CARES Act made a technical correction to the Tax Act impacting the Company’s NOL carryforward for the fiscal year ending September 29, 2018 by limiting it to a 20-year carryforward period, rather than having an indefinite life carryforward without the 80% limitation. This technical correction resulted in the Company increasing its indefinite lived deferred tax liability by $1.4 million during fiscal year 2020, with an offsetting adjustment to tax expense.

During fiscal year 2019 we finalized our calculation of the one-time deemed repatriation of gross foreign earnings and profits, totaling $156.8 million, which resulted in approximately $86.7 million in U.S. taxable income for the year ended September 28, 2018 with Grand Cayman and Ireland accounting for $59.7 million and $25.6 million, respectively. Due to the fact that we are in a full U.S. valuation allowance, this one-time deemed repatriation had no impact on our tax expense for fiscal year 2018.

On December 22, 2017, the U.S. Congress enacted the Tax Act, which enacted a wide range of changes to the U.S. corporate income tax system, many of which differ significantly from the provisions of the previous U.S. tax law. The Tax Act also transitions international taxation from a worldwide system with deferral to a modified territorial system and includes base erosion prevention measures on non-U.S. earnings, which has the effect of subjecting certain earnings of our foreign subsidiaries to U.S. taxation as Global Intangible Low Taxed Income. These changes became effective in our fiscal year ending September 29, 2018.

The liability for unrecognized tax benefits was $0.3 million as of October 2, 2020, September 27, 2019 and September 28, 2018 and there were no additions or reductions to this liability during fiscal years 2020 or 2019. The balance of the unrecognized tax benefit as of October 2, 2020, is included in other long-term liabilities in the accompanying Consolidated Balance Sheets. The entire balance of unrecognized tax benefits, if recognized, will reduce income tax expense.

It is our policy to recognize any interest and penalties accrued related to unrecognized tax benefits in income tax expense. During fiscal year 2020, we did not make any payment of interest and penalties. We did not accrue for the payment of interest and penalties in the Consolidated Balance Sheets as of October 2, 2020 or September 27, 2019, as the remaining unrecognized tax benefits would only serve to reduce our current federal and state NOL carryforwards, if ultimately recognized.

Generally, we are no longer subject to federal income tax examinations for years before 2018, except to the extent of loss and tax credit carryforwards from those years.