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Income Taxes
9 Months Ended
Oct. 31, 2020
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company computes its tax provision for interim periods by applying the estimated annual effective tax rate to year-to-date income from recurring operations and adjusting for discrete items arising in that quarter.
The Company had an effective tax rate of (0.3%) and (0.2%) for the three and nine months ended October 31, 2020, respectively, and (0.4%) and (0.3%) for the three and nine months ended October 31, 2019, respectively. The Company has incurred U.S. operating losses and has minimal profits in foreign jurisdictions.
The Company has evaluated all available evidence, both positive and negative, including historical levels of income and expectations and risks associated with estimates of future taxable income, and has determined that it is more likely than not that its net deferred tax assets will not be realized in the United States. Due to uncertainties surrounding the realization of the deferred tax assets, the Company maintains a full valuation allowance against its net deferred tax assets.
The Company is subject to income taxes in the United States and numerous foreign jurisdictions. As of October 31, 2020, tax years 2012 and forward generally remain open for examination for U.S. federal and state tax purposes; and tax years 2017 and forward generally remain open for examination for foreign tax purposes.
The Company has applied ASC 740, Income Taxes, and has determined that it has uncertain tax positions giving rise to unrecognized tax benefits for the three and nine months ended October 31, 2020, and 2019. The Company’s policy is to recognize interest and penalties related to uncertain tax positions in income tax expense. The Company does not anticipate any significant changes to unrecognized tax benefits over the next 12 months. None of the unrecognized tax benefits are currently expected to impact the Company’s effective tax rate, if realized, as a result of the full valuation allowance.
Certain countries where the Company does business have enacted legislation in response to the COVID-19 pandemic, including the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) enacted by the United States on March 27, 2020. The Company is continuing to analyze these legislative developments and believes that they have not had a material impact on its provision for income taxes for each of the three and nine months ended October 31, 2020.