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Income Taxes
9 Months Ended
Sep. 30, 2019
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
The Company’s effective income tax rate for the nine months ended September 30, 2019 was 3%. The income tax expense for the nine months ended September 30, 2019 was determined based upon estimates of the Company’s effective income tax rates in various jurisdictions. The difference between the Company’s effective income tax rate and the U.S. federal statutory rate is primarily attributable to state income taxes, foreign income taxes, the effect of certain permanent differences, the acquisition of Bellwether Bio, and full valuation allowance against net deferred tax assets.
The benefit from income taxes for the nine months ended September 30, 2019 relates primarily to the release of a valuation allowance of $1.2 million associated with nondeductible intangible assets recorded as part of the Bellwether Bio acquisition and the utilization of tax losses from continuing operations against other comprehensive income gains resulting in a tax benefit of $205,000 in accordance with intra-period tax allocation under FASB ASC Topic 740, Income Taxes (“ASC 740”), partially offset by state minimum income tax and income tax on the Company’s earnings in foreign jurisdictions. In connection with the acquisition of Bellwether Bio, a deferred tax liability was established for the book-tax basis differences related to the non-goodwill intangible assets. The net deferred tax liability from this acquisition creates an additional source of income to offset the Company’s deferred tax assets. As such, the impact on the acquiring company’s deferred tax assets and liabilities caused by an acquisition are recorded in the acquiring company’s consolidated financial statements outside of acquisition accounting. The income tax expense for the nine months ended September 30, 2018 relates primarily to state minimum income tax.
The benefit from income taxes for the three months ended September 30, 2019 relates primarily to the utilization of tax losses from continuing operations against other comprehensive income gains resulting in a tax benefit of $205,000 in accordance with intra-period tax allocation under ASC 740, partially offset by state minimum income tax and income tax on the Company’s earnings in foreign jurisdictions. The benefit from income taxes for the three months ended September 30, 2018 relates primarily to state minimum income tax.