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INCOME TAXES
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The components of loss before provision for income taxes for the years ended December 31, 2024, 2023 and 2022, were as follows (in thousands):
Year Ended December 31,
202420232022
Loss subject to domestic income taxes$(2,699,739)$(2,825,820)$(1,306,245)
Loss subject to foreign income taxes
(13,004)(1,574)2,164 
Loss before provision for income taxes
$(2,712,743)$(2,827,394)$(1,304,081)
The Company recorded provision for income taxes in connection with its domestic, state, and foreign subsidiaries for the years ended December 31, 2024, 2023 and 2022, respectively, as follows (in thousands):
Year Ended December 31,
202420232022
Current
Federal$— $— $— 
State— 24 14 
Foreign1,339 1,002 365 
Total current tax expense
$1,339 $1,026 $379 
Deferred
Federal$— $— $— 
State— — — 
Foreign(140)— — 
Total deferred tax expense
$(140)$— $— 
Total provision for income taxes$1,199 $1,026 $379 
The reconciliation of taxes at the federal statutory rate to our provision for income taxes for the years ended December 31, 2024, 2023 and 2022 were as follows:
Year Ended December 31,
202420232022
Statutory federal income tax rate21.0%21.0%21.0%
Stock-based compensation(1.6)(1.5)(0.6)
Change in fair value of warrant liability1.50.620.2
Tax-exempt interest——0.4
Nondeductible expenses0.6(1.5)0.4
Tax credits1.20.71.4
Change in valuation allowance(22.7)(19.3)(42.8)
Provision for income taxes
—%—%—%
The amount of provision for income taxes differs from the expected benefit due to the impact of the U.S. valuation allowance, as well as income taxes associated with foreign operations.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred taxes as of December 31, 2024 and 2023, were as follows (in thousands):
December 31,
20242023
Deferred tax assets:
Net operating loss carryforwards$1,605,236 $1,240,197 
Tax credit carryforwards192,810 139,672 
Stock-based compensation expense7,347 12,322 
Capitalization of research and development costs443,311 333,958 
Accruals and reserves232,487 215,087 
Lease liability
84,604 88,407 
Inventory
461,127 271,784 
Other60,935 21,815 
Total deferred tax assets3,087,857 2,323,242 
Valuation allowance(2,904,865)(2,137,851)
Total deferred tax assets, net of valuation allowance182,992 185,391 
Deferred tax liabilities:
Depreciation(72,023)(49,754)
Right-of-use assets(70,890)(74,565)
Tax accounting method change
(39,939)(61,072)
Total deferred tax liabilities(182,852)(185,391)
Deferred tax assets (liabilities), net of valuation allowance$140 $— 
The Company does not anticipate foreign earnings would be subject to U.S. taxation upon repatriation. However, distributions of unremitted foreign earnings may be subject to foreign withholding taxes. Accordingly, provisions have not been made on the Company’s basis differences in investments that primarily result from earnings in foreign subsidiaries which are indefinitely reinvested. If recorded, the deferred tax liability associated with indefinitely reinvested basis differences would be immaterial to the financial statements.
A valuation allowance is recognized if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized in a particular tax jurisdiction. All available evidence, both positive and negative, is considered to determine whether, based on the weight of that evidence, a valuation allowance is needed for some portion or all of a deferred tax asset. Judgment must be used in considering the relative impact of negative and positive evidence. Based on the weight of the available evidence, which includes the Company’s historical operating losses, lack of taxable income, and the accumulated deficit, as of December 31, 2024 and 2023, the Company provided a full valuation allowance against its U.S. and state deferred tax assets. The valuation allowance for deferred tax assets was $2,904.9 million and $2,137.9 million, as of December 31, 2024 and 2023, respectively. The valuation allowance on our net deferred taxes increased by $767.0 million and $763.6 million during the years ended December 31, 2024 and 2023, respectively.
The Company had federal, state, and foreign net operating loss carryforwards of $5,766.1 million, $5,142.4 million, and $19.1 million, respectively, as of December 31, 2024, which will begin to expire at various dates beginning in 2027. The Company also had federal and state tax research and development tax credit carryforwards of $151.8 million and $78.6 million, respectively. The federal research and development tax credit carryforwards will expire at various dates beginning in 2036, if not utilized. The state research and development tax credit carryforwards do not expire.
The Internal Revenue Code of 1986, as amended, imposes restrictions on the utilization of net operating losses and certain credits in the event of an “ownership change” of a corporation. Accordingly, a company’s ability to use net operating losses and certain credits may be limited as prescribed under.
Internal Revenue Code Section 382, which provide for limitations on net operating losses carryforwards and certain built in losses following ownership changes, and Section 383, which provides for special limitations on certain excess credits, etc. (collectively, “IRC Section 382”). Utilization of the carryforwards may be subject to substantial annual limitation due to the ownership change limitations provided by the IRC Section 382 and similar state provisions, resulting in a reduction in the gross deferral tax assets before considering the valuation allowance. The Company has completed a formal Section 382 study of our equity transactions through December 31, 2020. The study determined that the Company experienced an “ownership change” in 2016, and the Company will not be able to utilize $12.0 million of our U.S. federal net operating loss and $3.0 million of U.S. federal research and development tax credit carryforwards.
Uncertain Tax Positions
The following table summarizes the activity related to unrecognized tax benefits for the years ended December 31, 2024, 2023 and 2022 (in thousands):
December 31,
202420232022
Unrecognized benefit—beginning of period$140,767 $105,234 $72,330 
Gross increases—prior-period tax positions— 539 — 
Gross decreases—prior-period tax positions(111,065)(581)— 
Gross increases—current-period tax positions8,904 35,575 32,916 
Gross decrease—current-period tax positions— — — 
Statute lapse(83)— (12)
Unrecognized benefit—end of period$38,523 $140,767 $105,234 
As of December 31, 2024, 2023 and 2022, the total amount of unrecognized tax benefits was $38.5 million, $140.8 million, and $105.2 million, respectively, of which $0.9 million, $1.1 million and $0.6 million, if recognized for respective periods, would favorably impact the Company's effective tax rate. The Company does not anticipate a significant change in the total amount of unrecognized tax benefits within the next 12 months.
Related to the unrecognized tax benefits above, the interest expense and penalty expense recognized as part of provision for income taxes in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2024, 2023 and 2022 were not material. As of December 31, 2024 and 2023, the Company recorded immaterial liability for interest expense and penalties, which was included within other long-term liabilities in the consolidated balance sheets.
The Company files U.S., state, and foreign income tax returns with varying statutes of limitations. The federal, state, and foreign returns statutes of limitations remains open for all years. There are currently no income tax audits underway by U.S., state, or foreign tax authorities.