Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

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


	Years Ended December 31,
	2020		2019		2018
Current:
Federal	$	20,943	$	23,306	$	17,233
State	5,223		4,774		(617)
Foreign	36,387		15,988		3,094
Total current	62,553		44,068		19,710

Deferred:
Federal	(6,173)		(1,903)		16,083
State	694		(5,620)		2,965
Foreign	11,319		(55,921)		6,002
Total deferred	5,840		(63,444)		25,050
Total provision	$	68,393	$	(19,376)	$	44,760

Reconciliation of Statutory Federal Income Tax Rate with Effective Income Tax Rate

A reconciliation of the statutory federal income tax rate with J2 Global’s effective income tax rate is as follows:


	Years Ended December 31,
	2020		2019		2018
Statutory tax rate	21	%	21	%	21	%
State income taxes, net	1.5		0.9		1.2
Foreign rate differential	(0.1)		(3.8)		(7.7)
Foreign income inclusion	0.8		1.4		1.5
Foreign tax credit	(1.3)		(0.9)		(1.4)
Reserve for uncertain tax positions	3.5		(0.4)		4.1
Valuation allowance	3.7		0.2		0.2

Intra-entity tax benefit	—		(26.9)		—

Impact on deferred taxes of enacted tax law and rate changes	1.1		(1.3)		0.1
Contingent liabilities	—		0.6		2.4
Unrecognized loss on intercompany sale	—		—		1.9
Other	(0.5)		(0.5)		1.9
Effective tax rates	29.7	%	(9.7)	%	25.2	%

Deferred Tax Assets and Liabilities

Deferred tax assets and liabilities result from differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. Temporary differences and carryforwards which give rise to deferred tax assets and liabilities are as follows (in thousands):


	Years Ended December 31,
	2020		2019
Deferred tax assets:
Net operating loss carryforwards	$	21,183	$	43,352
Tax credit carryforwards	9,022		4,152
Accrued expenses	19,572		9,946
Allowance for bad debt	4,366		2,547
Share-based compensation expense	5,923		4,669

Impairment of investments	6,762		1,675

Deferred revenue	1,334		—
State taxes	5,124		3,206
Other	12,045		9,958
	85,331		79,505
Less: valuation allowance	(8,307)		(608)
Total deferred tax assets	$	77,024	$	78,897

Deferred tax liabilities:

Basis difference in property and equipment	$	(18,995)	$	(15,767)
Basis difference in intangible assets	(93,162)		(42,880)
Prepaid insurance	(2,905)		(1,847)

Convertible debt	(65,192)		(65,217)
Other	(2,925)		(663)
Total deferred tax liabilities	(183,179)		(126,374)
Net deferred tax liabilities	$	(106,155)	$	(47,477)

Reconciliation of Unrecognized Tax Benefits

The aggregate changes in the balance of unrecognized tax benefits, which excludes interest and penalties, for 2020, 2019 and 2018, is as follows (in thousands):


	Years Ended December 31,
	2020		2019		2018
Beginning balance	$	46,703	$	51,271	$	45,012
Increases related to tax positions during a prior year	3,952		5,285		2,508
Decreases related to tax positions taken during a prior year	(245)		(7,441)		—
Increases related to tax positions taken in the current year	4,299		4,069		3,751
Settlements	(5,627)		(5,831)		—
Decreases related to expiration of statute of limitations	—		(650)		—
Ending balance	$	49,082	$	46,703	$	51,271