Income tax benefit consisted of the following (in thousands):



	Years ended December 31,
	2015			2014			2013
Current:
U.S. federal	$	7,470		$	6,306		$	4,175
State	514			210			41
Total current expense	7,984			6,516			4,216
Deferred:
U.S. federal	(12,004		)	(9,800		)	(10,902		)
State	(538		)	(58		)	(699		)
Foreign	(65		)	—			—
Total deferred benefit	(12,607		)	(9,858		)	(11,601		)
Income tax benefit	$	(4,623	)	$	(3,342	)	$	(7,385	)

Income tax benefit differed from the amount computed by applying the statutory federal income tax rate of 35% as follows (in thousands):



	Years ended December 31,
	2015			2014			2013
Income tax benefit at the statutory federal income tax rate	$	(6,072	)	$	(3,110	)	$	(11,566	)
State income taxes, net of federal benefit	(15		)	99			(363		)
Deductible domestic manufacturing costs	(787		)	(594		)	(395		)
Non-deductible compensation	27			569			221
Non-deductible acquisition-related transaction costs (see Note 3)	2,524			—			—
Non-deductible loss on derivative instrument (the Warrant, see Note 10)	—			—			4,078
Change in liabilities for uncertain tax positions	—			(72		)	(201		)
Change in valuation allowance on unrealized capital losses	(223		)	(117		)	1,108
Other	(77		)	(117		)	(267		)
Income tax benefit	$	(4,623	)	$	(3,342	)	$	(7,385	)

The tax effect of temporary differences and net operating loss carryforwards that gave rise to the Company’s deferred tax assets and liabilities were as follows (in thousands):



	December 31,
	2015			2014
Deferred tax assets:
Net operating loss carryforwards	$	182,599		$	199,635
Accrued compensation	12,519			1,151
Deferred revenue	3,845			2,738
Tax credit carryforwards	10,797			10,370
Stock-based compensation	8,416			6,800
Basis difference in discontinued E-Commerce business	33,871			—
Other, net	6,720			5,471
Total gross deferred tax assets	258,767			226,165
Valuation allowance	(217,452		)	(211,865		)
Deferred tax assets, net of valuation allowance	41,315			14,300
Deferred tax liabilities:
Depreciation and amortization	(140,035		)	(28,815		)
Discount on Notes	(4,422		)	(5,767		)
Other, net	(378		)	—
Total gross deferred tax liabilities	(144,835		)	(34,582		)
Net deferred tax liabilities	$	(103,520	)	$	(20,282	)

At December 31, 2015, the Company evaluated the need for a valuation allowance for certain deferred tax assets based upon its assessment of whether it is more likely than not that the Company will generate sufficient future taxable income necessary to realize the deferred tax benefits. The Company maintains a valuation allowance against its deferred tax assets that are capital in nature to the extent that it is more likely than not that the related deferred tax benefit will not be realized. The Company has deferred tax assets related to net operating losses that arose from excess tax benefits for stock-based compensation and minimum tax credits that arose from the corresponding alternative minimum tax paid for those excess tax benefits. The Company must apply a valuation allowance against these equity-based deferred tax assets until the Company utilizes the deferred tax assets to reduce taxes payable. Accordingly, the Company does not consider these deferred tax assets when evaluating changes in the valuation allowance.

The changes in the valuation allowance for deferred tax assets are shown below (in thousands):



	Years ended December 31,
	2015		2014
Balance at beginning of year	$	211,865	$	235,730
Net changes to deferred tax assets, subject to a valuation allowance	5,587		(23,865		)
Balance at end of year	$	217,452	$	211,865

For the years ended December 31, 2015 and 2014, the valuation allowance change included increases of $22.1 million and $0.3 million, respectively, for changes in deferred tax assets that are capital in nature, and decreases of $16.7 million and $24.1 million, respectively, for the utilization of equity-based deferred tax assets to reduce taxes payable. As of December 31, 2015, $192.3 million of the valuation allowance pertained to equity-based deferred tax assets. The consolidated balance sheets reflect an increase in equity upon the release of this valuation allowance. Accordingly, income tax expense does not reflect a benefit for the release of this valuation allowance.

As of December 31, 2015, the Company’s U.S. federal and state net operating loss carryforwards for income tax purposes were $521.1 million and $32.0 million, respectively, which primarily related to excess tax benefits for stock-based compensation. When the net operating loss carryforwards related to stock-based compensation are recognized, the income tax benefit of those losses is accounted for as a credit to stockholders’ equity on the consolidated balance sheets rather than on the consolidated statements of comprehensive income. If not utilized, the Company’s federal net operating loss carryforwards will expire between 2020 and 2031, with the majority of them expiring between 2020 and 2024. Additionally, changes in ownership, as defined by Section 382 of the Internal Revenue Code, may limit the amount of net operating loss carryforwards used in any one year.

A reconciliation of the unrecognized tax benefit balances is as follows (in thousands):



	Years ended December 31,
	2015			2014			2013
Balance at beginning of year	$	18,403		$	18,537		$	19,088
Gross increases for tax positions of prior years	2,708			126			219
Gross decreases for tax positions of prior years	(9		)	(199		)	(101		)
Gross increases for tax positions of current year	751			—			—
Settlements	(112		)	(61		)	(562		)
Lapse of statute of limitations	—			—			(107		)
Balance at end of year	$	21,741		$	18,403		$	18,537

The total amount of unrecognized tax benefits that could affect the Company’s effective tax rate if recognized was $3.4 million and $0.5 million as of December 31, 2015 and 2014, respectively. The remaining $18.4 million and $17.9 million as of December 31, 2015 and 2014, respectively, if recognized, would create a deferred tax asset subject to a valuation allowance. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, various state jurisdictions, and Canada. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2011, although net operating loss carryforwards and tax credit carryforwards from any year are subject to examination and adjustment for at least three years following the year in which they are fully utilized. As of December 31, 2015, no significant adjustments have been proposed relative to the Company’s tax positions.

During the years ended December 31, 2015, 2014, and 2013, the Company recognized less than $0.1 million of interest and penalties related to uncertain tax positions. The Company had approximately $0.8 million and $0.3 million accrued for interest and penalties as of December 31, 2015 and 2014, respectively.