INCOME TAXES

Income tax expense for the three and nine months ended September 30, 2016 and September 30, 2015, respectively, varies from the amount that would result by applying the applicable United States corporate income tax rate of 34% to income (loss) from continuing operations before income tax expense. The following table summarizes the differences:



(in thousands)	Three months ended September 30,						Nine months ended September 30,
	2016			2015			2016			2015
Income tax expense (benefit) at United States statutory income tax rate	$	558		$	(296	)	$	(612	)	$	(3,139	)
Non-deductible compensation	82			65			531			203
Valuation allowance	(501		)	128			139			661
Foreign operations subject to different tax rates	36			31			110			186
Deconsolidation of subsidiary	—			(7		)	—			2,384
Non-taxable dividend income	—			—			—			(415		)
Other	(120		)	102			(61		)	199
Income tax expense	$	55		$	23		$	107		$	79

The Company maintains a valuation allowance for its gross deferred tax assets at September 30, 2016 and December 31, 2015. The Company's operations have generated substantial operating losses in prior years. These losses can be available to reduce income taxes that might otherwise be incurred on future taxable income; however, it is uncertain whether the Company will generate the taxable income necessary to utilize these losses or other reversing temporary differences. This uncertainty has caused management to place a full valuation allowance on its September 30, 2016 and December 31, 2015 net deferred tax asset.

The Company carries a deferred income tax liability of $6.1 million at September 30, 2016, $3.1 million of which relates to deferred income tax liabilities reversing in periods after the expiration of the Company's loss carryforwards and $3.0 million of which relates to indefinite life intangible assets. The Company carries a deferred income tax liability of $2.9 million at December 31, 2015, all of which relates to indefinite life intangible assets. The Company considered tax planning strategies in arriving at its September 30, 2016 deferred income tax liability.

As of September 30, 2016 and December 31, 2015, the Company carried a liability for unrecognized tax benefits of $1.3 million and zero, respectively, that is included in income taxes payable in the consolidated balance sheets. The Company classifies interest and penalty accruals, if any, related to unrecognized tax benefits as income tax expense. During the three months ended September 30, 2016 and September 30, 2015, the Company recognized an expense for interest and penalties of $0.0 million and zero, respectively ($0.0 million and zero for the nine months ended September 30, 2016 and September 30, 2015, respectively). At September 30, 2016 and December 31, 2015, the Company carried an accrual for the payment of interest and penalties of $0.3 million and zero, respectively.