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Income Taxes
9 Months Ended
Dec. 31, 2017
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
The Company is subject to income tax in the United States as well as other tax jurisdictions in which it conducts business. Earnings from non-U.S. activities are subject to local country income tax. The Company does not provide for federal income taxes on the undistributed earnings of its foreign subsidiaries as such earnings are expected to be reinvested indefinitely.
The Company recorded an income tax provision of $0.2 million and an income tax benefit of $37,000 for the three months ended December 31, 2017 and 2016, respectively, and an income tax provision of $0.6 million and $23,000 for the nine months ended December 31, 2017 and 2016, respectively, related to foreign income taxes and state minimum taxes. Based on the available objective evidence during the three and nine months ended December 31, 2017, the Company believes it is more likely than not that the tax benefits of the U.S. losses incurred during the three and nine months ended December 31, 2017 may not be realized. Accordingly, the Company did not record the tax benefits of U.S. losses incurred during the three and nine months ended December 31, 2017. The primary difference between the effective tax rate and the local statutory tax rate relates to the valuation allowance on the Company’s U.S. losses, foreign tax rate differences, and amortization of a deferred charge associated with the intercompany transfer of intellectual property from prior periods.
On December 22, 2017, the Tax Cuts and Jobs Act (the “TCJA”) was signed into federal law, which among other changes reduces the federal corporate tax rate to 21%. The Company does not expect the TCJA to have a material impact on its condensed consolidated financial statements due to its valuation allowance in the U.S., which nets deferred tax balances to zero. Based on the Company’s analysis, deferred tax assets have been revalued from 34% to 21% with a corresponding offset to the valuation allowance and any other potential taxes arising due to the TCJA will result in reductions to its net operating loss and valuation allowance. The Company will continue to analyze the TCJA to assess the full effects on the Company’s financial results, including disclosures, for its fiscal year ending March 31, 2018.