
	Years ended December 31,
	2020		2019		2018
	(In thousands)
United States	$	107,489	$	187,511	$	157,533
Foreign	(91,837)		35,154		34,054
	$	15,652	$	222,665	$	191,587


	Years ended December 31,
	2020		2019		2018
	(In thousands)
Current income tax expense (benefit):
Federal	$	(4,674)	$	32,922	$	25,225
State	5,971		13,379		9,915
Foreign	(360)		7,321		3,935
	937		53,622		39,075
Deferred tax benefit:
Federal	(150)		(4,727)		(188)
State	(10,971)		(2,739)		(2,550)
Foreign	(1,156)		(3,877)		(2,731)
	(12,277)		(11,343)		(5,469)
Income tax expense (benefit)	$	(11,340)	$	42,279	$	33,606

The CARES Act provided a technical correction regarding Qualified Improvement Property (“QIP”) and the election to take bonus depreciation on such property. This correction allows taxpayers to retroactively accelerate depreciation on QIP. The Federal current and deferred benefit for 2020 includes the impact of a $10 million acceleration of the tax deduction for depreciation related to 2019 additions.


	Years ended December 31,
	2020		2019		2018
	(In thousands)
Federal income tax expense computed at statutory rate	$	3,287	$	46,760	$	40,233
State income tax expense (benefit) — net of federal income tax	(4,491)		8,522		6,466
Valuation allowance — net	2,116		—		—
Intercompany interest	1,125		(5,213)		(8,367)
Permanent differences and other — net	1,655		1,940		(1,417)
Stock-based compensation	(12,901)		(10,990)		(9,446)
Unbenefited foreign loss	233		—		—
Change in income tax rate	(360)		—		(548)



Global Intangible Low-Taxed Income	(1,418)		1,277		2,893
Change to uncertain tax positions — net	(510)		(1,931)		1,657
Foreign rate differential	(76)		1,914		2,135
Income tax expense (benefit)	$	(11,340)	$	42,279	$	33,606

On December 22, 2017, the U.S. federal government enacted comprehensive tax legislation with the Tax Cuts and Jobs Act (“Tax Act”) that made changes to the U.S. tax code impacting the year ended December 31, 2017 and future years. The Tax Act introduced the Global Intangible Low-Taxed Income (“GILTI”) regime. The taxes on GILTI are accounted for as period costs when incurred. Updated GILTI regulations were released by the U.S. Treasury in July 2020 allowing retroactive annual elections to exclude GILTI that is subject to an effective foreign income tax rate exceeding ninety percent of the maximum U.S. corporate tax rate.

The effective income tax rate for 2020 was a benefit of (72.5)% and includes current tax benefit of $3.4 million related to prior years and a $1.4 million retroactive reduction of GILTI for taxable years 2018 and 2019 for the high-tax exclusion that was included in the updated GILTI regulations. Based on the Company’s jurisdictional mix of taxable income, there was no additional federal income tax expense attributable to GILTI for 2020. Income tax expense was reduced by $16.2 million in 2020 for the excess tax benefits associated with the exercise of stock options and vesting of restricted stock.

The effective income tax rate for 2019 was 19.0%. The GILTI regime resulted in additional federal income tax expense of $1.3 million during the year. Additionally, income tax expense was reduced by $13.9 million in 2019 for the excess tax benefits associated with the exercise of stock options and vesting of restricted stock.

The effective income tax rate for 2018 was 17.5%. The GILTI regime resulted in additional federal income tax expense of $2.9 million during the year. Additionally, income tax expense was reduced by $12.1 million in 2018 for the excess tax benefits associated with the exercise of stock options and vesting of restricted stock. Included in permanent differences and other — net in the rate reconciliation above is a $3.7 million benefit related to finalizing intercompany interest deductions for prior year foreign tax returns.


	December 31,
	2020		2019
	(In thousands)
Deferred tax assets:
Reserve on assets	$	400	$	259
Net operating/capital loss carryforwards	560		338
Liabilities not yet deductible	14,377		10,949
Deferred revenue	3,548		3,415
Stock-based compensation	11,523		9,906
Operating lease liabilities	204,688		190,537
Other	6,414		4,693
Deferred tax assets	241,510		220,097
Less: valuation allowance	(2,116)		—
Total net deferred tax assets	239,394		220,097

Deferred tax liabilities:
Operating lease right-of-use assets	(174,961)		(169,117)
Intangible assets	(80,515)		(86,064)
Depreciation	(29,869)		(23,764)
Total deferred tax liabilities	(285,345)		(278,945)
Net deferred tax liability	$	(45,951)	$	(58,848)

The Company has foreign net operating loss carryforwards of $1.0 million and has recorded an associated deferred tax asset totaling $0.2 million. The net operating losses are in certain foreign jurisdictions and can be carried forward indefinitely.

During the year ended December 31, 2020, the Company recorded a valuation allowance on $2.1 million of deferred tax assets. The Company assesses available positive and negative evidence to estimate if there is sufficient future taxable income to use the existing deferred tax assets. Based on the weight of evidence, the Company determined that it was more likely than not that the deferred tax assets would not be realized.

At December 31, 2019, the net deferred tax liability of $58.8 million includes deferred tax assets of $0.1 million which are included in other assets in the consolidated balance sheet.

The Company considers the earnings of certain non-U.S. subsidiaries to be indefinitely invested outside the United States on the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs and the Company’s specific plans for reinvestment of those subsidiary earnings. The Company has not recorded a deferred tax liability of approximately $1.7 million related to the state taxes and foreign withholding taxes on approximately $124.3 million of cumulative undistributed earnings of foreign subsidiaries indefinitely invested outside the United States.


	Years ended December 31,
	2020		2019		2018
	(In thousands)
Beginning balance	$	3,725	$	5,444	$	1,903
Additions for tax positions of prior years	118		755		2,937
Additions for tax positions of current year	—		—		684

Reductions for tax positions of prior years	—		(2,507)		—
Lapses of statutes of limitations	(854)		—		—
Effect of foreign currency adjustments	(60)		33		(80)
Ending balance	$	2,929	$	3,725	$	5,444

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense, which were immaterial for each of the years ended December 31, 2020, 2019 and 2018. Total interest and penalties accrued as of December 31, 2020 was $1.1 million. In 2020, the Company reduced unrecognized tax benefits by $0.9 million for lapse of statute of limitations, and recorded an unrecognized tax benefit for prior year tax positions in the U.S. In 2019, the Company reduced unrecognized tax benefits by $2.5 million for prior year tax positions of foreign subsidiaries. During 2018, the Company recorded unrecognized tax benefits for the U.S. and a foreign subsidiary’s prior year tax positions.

The total amount of unrecognized tax benefits that if recognized would affect the Company’s effective tax rate is $4.0 million, inclusive of interest. The unrecognized tax benefits could change over the next 12 months if certain tax matters ultimately settle with the applicable taxing jurisdiction during this time frame, or if applicable statutes of limitations lapse. The impact of the amount of such changes to previously recorded uncertain tax positions could range from zero to $2.8 million.

The Company and its domestic subsidiaries are subject to U.S. federal income tax as well as multiple state jurisdictions. U.S. federal income tax returns are typically subject to examination by the Internal Revenue Service (IRS) and the statute of limitations for federal income tax returns is three years. The Company’s filings for the tax years 2017 through 2019 are subject to audit based upon the federal statute of limitations.

State income tax returns are generally subject to examination for a period of three to four years after filing of the respective return. The state impact of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states. As of December 31, 2020, there were two income tax audits in process and the tax years from 2016 to 2019 are subject to audit.

The Company is also subject to corporate income tax at its subsidiaries located in the United Kingdom, the Netherlands, India, Ireland and Puerto Rico. The tax returns for the Company’s subsidiaries located in foreign jurisdictions are subject to examination for periods ranging from one to five years.