The provision (benefit) for income taxes consisted of the following (in thousands):

	YEAR ENDED SEPTEMBER 30,
	2019			2018
Current
Federal	$	(16	)	$	(613	)
Foreign		2,401			51
State		16			—
		2,401			(562	)
Deferred:
Federal		—			—
Foreign		16			(18	)
		16			(18	)
	$	2,417		$	(580	)

Actual income tax expense (benefit) differs from income tax expense computed by applying the U.S. statutory federal tax rate of 21% and 24% (blended) for the fiscal years ended September 30, 2019 and 2018 as follows (in thousands):

	YEAR ENDED SEPTEMBER 30,
	2019			2018
Expense (benefit) for U.S federal income tax at statutory rate	$	477		$	(4,849	)
Effect of foreign income taxes		(101	)		(47	)
Research and experimentation tax credit		(812	)		(320	)
State income taxes, net of federal income tax benefit		(161	)		(23	)
Nondeductible expenses		105			33
Resolution of prior years’ tax matters		14			(657	)
Change in valuation allowance		964			(4,237	)
Impact on deferred taxes due to change in tax rate		—			8,116
Difference in U.S. tax rate from assumed rate		—			511
Change in fair value of contingent consideration		(444	)		—
Foreign income tax withholding		2,358			11
Disallowance of stock compensation adjustments in excess of book		31			895
Other items		(14	)		(13	)
	$	2,417		$	(580	)
Effective tax rate		106.4	%		2.9	%

The income tax expense for fiscal year 2019 primarily reflects foreign withholding tax on rental income earned in Nigeria and Brunei. The income tax benefit for fiscal year 2018 primarily reflects a $0.7 million tax refund resulting from the filing of an amended U.S. tax return. The Company is currently unable to record any tax benefits for its tax losses in the U.S. and Canada due to the uncertainty surrounding its ability to utilize such losses in the future to offset taxable income.

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 net deferred income tax asset were as follows (in thousands):

	AS OF SEPTEMBER 30, 2019									AS OF SEPTEMBER 30, 2018
	U.S.			Non U.S.			Total			U.S.			Non U.S.			Total
Deferred income tax assets:
Allowance for doubtful accounts	$	189		$	3		$	192		$	545		$	8		$	553
Inventories		7,652			79			7,731			6,870			68			6,938
Loss and tax credit carry-forwards		18,156			4,221			22,377			17,056			4,151			21,207
Stock-based compensation		691			—			691			614			—			614
Accrued product warranty		43			4			47			136			8			144
Accrued compensated absences		313			—			313			259			—			259
Property and equipment		—			462			462			—			457			457
Prepaid income taxes		753			—			753			714			—			714
Other reserves		13			8			21			56			6			62
		27,810			4,777			32,587			26,250			4,698			30,948
Deferred income tax liabilities:
Allowance for doubtful accounts		—			—			—			—			(6	)		(6	)
Intangible assets		(1,386	)		(5	)		(1,391	)		(1,681	)		—			(1,681	)
Property, plant and equipment and other		(4,919	)		(59	)		(4,978	)		(3,622	)		(59	)		(3,681	)
Subtotal deferred income tax assets		21,505			4,713			26,218			20,947			4,633			25,580
Valuation allowance		(21,502	)		(4,531	)		(26,033	)		(20,931	)		(4,448	)		(25,379	)
Net deferred income tax assets	$	3		$	182		$	185		$	16		$	185		$	201

Deferred income tax assets and liabilities are reported as follows in the accompanying consolidated balance sheets (in thousands):

The 2017 Tax Act was enacted in December 2017. The 2017 Tax Act, among other things, reduces the U.S. federal corporate tax rate from 35% to 21%, effective January 1, 2018, creates new taxes on certain foreign earnings and may require companies to pay a one-time transition tax on undistributed earnings of certain foreign subsidiaries that were previously tax deferred. The Company is not required to pay a one-time transition tax on earnings of our foreign subsidiaries since there were no accumulated earnings on a consolidated basis. As a result of the 2017 Tax Act, during the fiscal year ended September 30, 2018, the Company revalued its U.S. deferred tax assets based on a U.S. federal tax rate of 21%, which resulted in a reduction to our deferred tax assets of approximately $8.1 million. The reduction in deferred tax assets was completely offset by a like reduction to the valuation allowance.

The financial reporting basis of investments in foreign subsidiaries exceed their tax basis. A deferred tax liability is not recorded for this temporary difference because the investment is deemed to be permanent. A reversal of the Company’s plans to permanently invest in these foreign operations would cause the excess to become taxable. At September 30, 2019, the Company had $7.0 million of cash and cash equivalents held by its foreign subsidiaries. At September 30, 2019 and 2018, the temporary difference related to undistributed earnings for which no deferred taxes have been provided was approximately $12.9 million and $12.9 million, respectively.

Tax return filings which are subject to review by local tax authorities by major jurisdiction are as follows:

The Company had no unrecognized tax liabilities as of September 30, 2019 and 2018.

As of September 30, 2019, the Company had net operating loss (“NOL”) carry-forwards of approximately $61.7 million in the United States, $15.2 million in Canada and $0.5 million in Russia which are available to offset future taxable income in those jurisdictions. The NOL carry-forwards for Canada and Russia begin to expire in 2033 and 2026, respectively. The NOL carry-forward for the United States which originated prior to the 2017 Tax Act of $41.4 million begins to expire in 2028. The Company’s NOLs originating after the 2017 Tax Act of $17.5 million do not expire.

Management of the Company has concluded that it was more-likely-than-not that its U.S. and Canadian net deferred tax assets will not be realized in accordance with U.S. GAAP. At September 30, 2019 and September 30, 2018, the Company had a valuation allowance against its U.S. net deferred tax assets of $21.5 million and $20.9 million, respectively, and a valuation allowance against its Canadian net deferred tax assets of $4.5 million and $4.4 million, respectively.