12.	INCOME TAXES

Components of the provision for income taxes were as follows:

	Year Ended December 31,
	2019		2018		2017
Current:
Federal	$	-	$	-	$	-
State		115		200		150
Total		115		200		150

Deferred:
Federal		120		-		(424	)
State		33		-		-
Total		153		-		(424	)

Total provision (benefit)	$	268	$	200	$	(274	)

Effective Tax rate

The reconciliation of the effective tax rate to the U.S. Statutory Federal Income tax rate was:

	Year Ended December 31,
	2019					2018					2017
Income (loss) before taxes	$	2,283				$	(6,345	)			$	(11,758	)

Expected tax (benefit)	$	479		21.0	%	$	(1,332	)	21.0	%	$	(4,115	)	35.0	%
State tax benefit (net of federal)		148		6.5			200		(3.2	)		150		(1.3	)
Valuation allowance		(428	)	(18.8	)		1,230		(19.4	)		(13,920	)	118.4
Federal tax reform - deferred rate change		-		-			49		(0.8	)		17,671		(150.3	)
Other		69		3.0			53		(0.8	)		(60	)	0.5
Total	$	268		11.7	%	$	200		(3.2	%)	$	(274	)	2.3	%

On December 22, 2017, the U.S. government enacted comprehensive tax legislation known as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act establishes new tax laws that took effect in 2018, including, but not limited to (1) reduction of the U.S. federal corporate tax rate from a maximum of 35% to 21%; (2) elimination of the corporate alternative minimum tax (AMT); (3) a new limitation on deductible interest expense; (4) the repeal of the domestic production activity deduction; (5) limitations on the deductibility of certain executive compensation; and (6) limitation on net operating losses generated after December 31, 2017, to 80% of taxable income. In addition, certain changes were made to the bonus depreciation rules that impacted fiscal year 2017.

Our provision for income taxes was $0.3 million, or 11.7% of pretax income, for the year ended December 31, 2019, compared to a benefit for income taxes of $0.2 million, or 3.2% of pretax loss, in the prior year comparable period. No federal or state income tax benefit was recognized for the current period loss due to the recognition of a full valuation allowance. Income tax expense resulted from various minimal state tax expenses.

Deferred Taxes and Valuation Allowance

The components of the non-current deferred tax (liabilities)/assets were as follows:

	At December 31,
	2019			2018
Gross noncurrent deferred tax (liabilities) assets
Allowance for bad debts	$	5,461		$	4,828
Accrued rent		-			1,833
Stock-based compensation		178			18
Lease liability		14,822			-
Right-of-use asset		(13,156	)		-
163J interest limitation		-			19
Depreciation		10,981			16,259
Goodwill		(766	)		(98	)
Other intangibles		135			211
Pension plan liabilities		1,286			1,163
Net operating loss carryforwards		18,261			17,927
AMT credit		-			424
Gross noncurrent deferred tax assets, net		37,202			42,584
Less valuation allowance		(37,355	)		(42,160	)
Noncurrent deferred tax (liabilities) assets, net	$	(153	)	$	424

Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence was the cumulative losses incurred by the Company in recent years.

On the basis of this evaluation the Company believes it is not more likely than not that it will realize its deferred tax assets As a result, as of December 31, 2019 and 2018, the Company has recorded a valuation allowance of $37.4 million and $42.2 million, respectively, against its net deferred tax assets. With respect to AMT credit, the Company has recorded a $0.4 million receivable since it is expected that 50% will be refunded as a result of filing the Company’s 2018 federal corporate income tax return and the remaining 50% will be refunded upon the filings of the Company’s future federal corporate income tax returns.

As of December 31, 2019, the Company has net operating loss (“NOL”) carryforwards of $66.7 million. Of the $66.7 million NOL carryforwards, $58.5 million will start expiring in 2029 and ending in 2038 if unused. The net operating losses of $8.2 million generated in 2018 can be carried over indefinitely under the Tax Act. Utilization of the NOL carryforwards may be subject to a substantial limitation due to ownership change limitations that may occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), as well as similar state and foreign provisions. These ownership changes may limit the amount of NOL and tax credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an “ownership change” as defined by Section 382 of the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain shareholders or public groups.

As of December 31, 2019, 2018 and 2017, the Company no longer has any liability for uncertain tax positions. The Company recognizes accrued interest and penalties related to uncertain tax positions in income tax expense.

The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various states. The Company is no longer subject to U.S. federal income tax examinations for years before 2016 and, generally, is no longer subject to state and local income tax examinations by tax authorities for years before 2016 with few exceptions.