Our income (loss) before income taxes and equity in net loss of affiliate consists of the following (in thousands):

	Year Ended February 28,
	2019		2018		2017
Domestic	$	21,367	$	13,898	$	(11,910	)
Foreign		2,488		14,811		3,727
Total income (loss) before income taxes and equity in net loss of affiliate	$	23,855	$	28,709	$	(8,183	)

The components of income tax benefit (provision) consists of the following (in thousands):

	Year Ended February 28,
	2019			2018			2017
Current:
Federal	$	404		$	(412	)	$	-
State		(256	)		(694	)		(137	)
Foreign		(62	)		(2,204	)		(1,035	)
Total current		86			(3,310	)		(1,172	)
Deferred:
Federal		(2,015	)		(6,156	)		1,712
State		(1,183	)		(1,458	)		539
Foreign		4,442			243			484
Total deferred		1,244			(7,371	)		2,735
Income tax benefit (provision)	$	1,330		$	(10,681	)	$	1,563

The income tax benefit (provision) differs from the amount obtained by applying the statutory rate as follows (in thousands):

	Year Ended February 28,
	2019			2018			2017
Income tax benefit (provision) at U.S. statutory federal rate	$	(5,010	)	$	(9,400	)	$	2,864
State income tax provision, net of federal income tax effect		(1,300	)		(574	)		182
Foreign taxes		(31	)		2,923			68
Impact of tax reform		-			(8,955	)		-
Valuation allowance reductions (increases)		5,915			3,046			(1,391	)
Research and development tax credits		1,658			1,034			806
Tax benefits on vested and exercised equity awards		758			937			-
Other, net		(660	)		308			(966	)
Total income tax benefit (provision)	$	1,330		$	(10,681	)	$	1,563

The components of net deferred income tax assets for income tax purposes are as follows (in thousands):

	February 28,
	2019			2018
Net operating loss carryforwards	$	19,269		$	22,013
Depreciation, amortization and impairments		(11,945	)		(11,112	)
Research and development credits		19,189			17,432
Stock-based compensation		2,783			2,376
Other tax credits		1,018			2,015
Inventory reserve		624			292
Warranty reserve		313			429
Payroll and employee benefit accruals		2,220			1,941
Allowance for doubtful accounts		454			354
Other accrued liabilities		6,208			8,975
Convertible debt		(10,822	)		(194	)
Other, net		3,281			3,904
Gross deferred tax assets		32,592			48,425
Valuation allowance		(10,929	)		(16,844	)
Net deferred tax assets	$	21,663		$	31,581

Reported as:
Deferred tax assets	$	22,626		$	31,581
Deferred tax liabilities		(963	)		-
Net deferred tax assets	$	21,663		$	31,581

The net deferred tax assets as of February 28, 2018 in the above table include the deferred tax assets of our Italian and Canadian subsidiaries amounting to $7.4 million and $7.6 million, respectively, which were disclosed narratively in the fiscal 2018 Form 10-K. The deferred tax assets primarily relate to net operating losses (NOL’s) and research and development expenditure pool carryforwards. We had provided a 100% valuation allowance against these deferred tax assets at February 28, 2018, as it was more likely than not that the deferred tax assets would not be realized.

As of February 28, 2019 and 2018, we maintained a valuation allowance with respect to certain of our deferred tax assets relating primarily to NOL’s in certain non-U.S. jurisdictions and certain state tax credits that we believe are not likely to be realized. During fiscal 2019, we decreased the valuation allowance against our deferred tax assets by approximately $5.9 million, as it is more likely than not that these deferred tax assets would be realized based upon the assessment of positive and negative evidence. This reduction in our valuation allowance is primarily attributable to a release of valuation allowance against foreign deferred tax assets, partially offset by an increase in valuation allowances for state tax credits.

At February 28, 2019, we had net operating loss carryforwards of approximately $30.1 million, $60.8 million and $44.7 million for federal, state and foreign purposes, respectively, expiring at various dates through fiscal 2039. Approximately $18.3 million of foreign net operating loss carryforwards do not expire. The federal net operating loss carryforwards are subject to various limitations under Section 382 of the Internal Revenue Code. If substantial changes in our ownership were to occur, there may be certain annual limitations on the amount of the NOL carryforwards that can be utilized.

As of February 28, 2019, we had R&D tax credit carryforwards of $9.1 million and $8.9 million for federal and state income tax purposes, respectively. The federal R&D tax credits expire at various dates through 2039. A substantial portion of the state R&D tax credits have no expiration date.

We adopted the updated guidance on stock based compensation and we have tax deductions on exercised stock options and vested restricted stock awards that exceed stock compensation expense amounts recognized for financial reporting purposes. The gross excess tax deductions were $2.9 million, $2.6 and $0 in fiscal years 2019, 2018 and 2017, respectively. Under the new guidance, all excess tax benefits and tax deficiencies are recognized in the income statement as they occur.

We follow ASC Topic 740, “Income Taxes,” which clarifies the accounting for income taxes by prescribing a minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements. Management determined based on our evaluation of our income tax positions that we have uncertain tax benefit of $3.2 million, $1.0 million and $1.0 million on at February 28, 2019, 2018 and 2017, respectively, for which we have not yet recognized an income tax benefit for financial reporting purposes.

At February 28, 2019, we increased the uncertain tax benefits related to certain foreign net operating loss carryforwards. Such deferred tax assets were previously offset by a valuation allowance so that the increase in the unrecognized tax benefit coupled with the reduction of the valuation allowance on such net operating losses did not result in an income tax expense during the current fiscal year. If total uncertain tax benefits were realized in a future period, it would result in a tax benefit of $3.2 million. As of February 28, 2019, our liabilities for uncertain tax benefits were netted against our deferred tax assets on our consolidated balance sheet. It is reasonably possible the amount of unrecognized tax benefits could be reduced within the next 12 months by at least $0.6 million.

We recognize interest and/or penalties related to uncertain tax positions in income tax expense. No amounts of interest and/or penalties have been accrued as of February 28, 2019.

	Year Ended February 28,
	2019			2018		2017
Gross amounts of unrecognized tax benefits at beginning of the period	$	1,029		$	1,029	$	1,029
Increases related to prior period tax positions		2,241			-		-
Decreases related to prior period tax positions		(69	)		-		-
Increases related to current period tax positions		-			-		-
Settlements		-			-		-
Gross amounts of unrecognized tax benefits at end of the period	$	3,201		$	1,029	$	1,029

We file income tax returns in the U.S. federal jurisdiction, various U.S. states and Puerto Rico, Canada, Ireland, Italy, United Kingdom, the Netherlands, Brazil and New Zealand. Certain income tax returns for the years 2014 through 2017 remain open to examination by U.S. federal and state tax authorities. To the extent allowed by law, the tax authorities may have the right to examine prior periods in which net operating losses or tax credits were generated and carried forward, and to make adjustments up to the net operating loss or tax credit carryforward amount. Our tax returns in the foreign jurisdictions remain open for examination for varying years by jurisdiction with certain jurisdictions being open for examination from 2013 to the present.

The Tax Cuts and Jobs Act (“The Act”) was enacted on December 22, 2017. In addition to other items, the Act (i) reduces the U.S. federal corporate tax rate from 35% to 21%, (ii) requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, and (iii) creates new taxes on certain foreign-sourced earnings. During fiscal year ended February 28, 2018, we recognized a reasonable estimate of the effects on our existing deferred tax balances in the amount of $6.6 million, which was included as a component of our income tax expense. The charge was principally related to the impact of remeasuring certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future.

The one-time transition tax is based on our total E&P of foreign CFCs that were previously excluded from U.S. income taxes. During the fiscal year ended February 28, 2018, we recognized a reasonable estimate of our one-time transition tax liability resulting in an increase in income tax expense of $2.4 million. The transition tax is based in part on the amount of those earnings held in cash and other specified assets. A significant portion of the transition tax liability is offset by the utilization of foreign tax credits, which were previously subject to a full valuation allowance. Accordingly, the net income tax expense associated with the transition tax was zero.

We completed our accounting for the income tax effects of the Tax Act in 2018, and no material adjustments were required to the provisional amounts recorded for our existing deferred tax balances and the one-time transition tax.

We previously considered the earnings in our non-U.S. subsidiaries to be indefinitely reinvested and accordingly, recorded no deferred income taxes. We have reevaluated our historic assertion and no longer consider the earnings of our Irish subsidiary to be indefinitely reinvested. As a result of our change in assertion, we recorded a state income tax expense of approximately $0.3 million related to outside basis differences that are no longer permanently reinvested in fiscal 2019. We continue to assert our intention to indefinitely reinvest foreign earnings in all remaining foreign subsidiaries.