Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income before Income Taxes for Domestic and Foreign Operations

Income before income taxes for domestic and foreign operations is as follows:

	Years Ended December 31,
	2020		2019		2018
	(in thousands)
Domestic	$	42,690	$	34,161	$	31,379
Foreign	215		94		(118)
Total income before income taxes	$	42,905	$	34,255	$	31,261

Components of Income Tax Expense (Benefit)

Components of income tax expense consist of the following:

	Years Ended December 31,
	2020		2019		2018
	(in thousands)
Current
Federal	$	—	$	—	$	—
State	—		—		—
Total current income tax expense	$	—	$	—	$	—
Deferred
Federal	$	4,514	$	2,693	$	1,939
State	16		20		4
Total deferred income tax expense	$	4,530	$	2,713	$	1,943
Total income tax expense	$	4,530	$	2,713	$	1,943

Reconciliation of the U.S. Statutory Tax Rate to the Effective Income Tax Rate

The Company’s operations are primarily conducted in the state of Nevada, which does not have a corporate level income tax. A reconciliation of the U.S. statutory tax rate to the effective income tax rate is presented below:

	Years Ended December 31,
	2020		2019		2018
U.S. statutory tax rate	21.0	%	21.0	%	21.0	%
Rate effect from pass-through entity	(11.1)		(13.9)		(17.0)
Other	0.7		0.8		2.2
Effective income tax rate	10.6	%	7.9	%	6.2	%

Significant Components of Deferred Tax Assets and Liabilities

Significant components of Switch, Inc.’s deferred tax assets and liabilities were as follows as of:

	December 31,
	2020		2019
	(in thousands)
Deferred tax assets:
Investment in partnership	$	144,688	$	93,089
Net operating loss carryforwards	58,513		21,283
	203,201		114,372
Less: valuation allowance	—		—
	$	203,201	$	114,372
Deferred tax liabilities:
Other	$	—	$	—
	$	—	$	—
Net deferred tax assets	$	203,201	$	114,372