Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

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Income Taxes
9 Months Ended
Sep. 30, 2016
Income Taxes [Abstract]  
Income Taxes

Note 7 - Income Taxes

 

Income tax expense was $8.0 thousand and $8.0 thousand for the three months ended September 30, 2016 and 2015, respectively, and $27.0 thousand and $29.0 thousand for the nine months ended September 30, 2016 and 2015, respectively. Our effective tax rate was 0.7% and (0.8%) for the three months ended September 30, 2016 and 2015, respectively, and 1.0% and (1.1%) for the nine months ended September 30, 2016 and 2015, respectively. Our effective tax rates differed from the U.S. statutory corporate tax rate of 35.0% primarily because of the mix of pre-tax income or loss earned in certain jurisdictions and the change in our valuation allowance.

 

We record a valuation allowance when it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. As of September 30, 2016 and December 31, 2015, a valuation allowance of $6.1 million and $7.2 million, respectively, has been provided against net operating loss carryforwards and other deferred tax assets. Our valuation allowance decreased by $1.1 million and $0.2 million for the nine months ended September 30, 2016 and 2015, respectively.

 

As of September 30, 2016 and December 31, 2015, we had total unrecognized tax benefits of $1.7 million, related to foreign and domestic tax positions. Of this amount, the Company estimates that $0.1 million, of the unrecognized tax benefits, if recognized, would impact the effective tax rate. A substantial portion of our liability for uncertain tax benefits is recorded as a reduction of net operating losses and tax credit carryforwards.

 

During the nine months ended September 30, 2016 and 2015, we had no material changes in uncertain tax positions. We record interest and penalties related to unrecognized tax benefits within the provision for income taxes. We believe that no current tax positions that have resulted in unrecognized tax benefits will significantly increase or decrease within one year. We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions.