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Income Taxes
12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes
15. Income Taxes
The following table presents domestic and foreign components of loss before income taxes for the tax years ended December 31, 2019, 2020 and 2021:
Year Ended December 31,
201920202021
(In thousands)
United States$(15,229)$(25,745)$(27,547)
International(3,227)(3,648)
Loss before income taxes$(15,224)$(28,972)$(31,195)

Benefit (provision) for income taxes from operations consists of the following:
Year Ended December 31,
201920202021
(In thousands)
Current:
Federal$81 $431 $(2,713)
State132 (87)(145)
Foreign(1,083)(1,627)
Total216 (739)(4,485)
Deferred:
Federal15,205 (9,847)(364)
State2,297 (5,176)— 
Foreign— 757 8,682 
Total17,502 (14,266)8,318 
Income tax benefit (provision)$17,718 $(15,005)$3,833 
The following table presents a reconciliation of the statutory federal tax rate and the Company's effective tax rate for the years ended December 31, 2019, 2020 and 2021:
Year Ended December 31,
201920202021
Federal Tax Rate21.0 %21.0 %21.0 %
State Tax Rate3.1 2.0 2.8 
Non-deductible expenses(1.6)(9.2)(4.4)
Research credit7.2 10.5 6.2 
Stock-based compensation88.6 46.8 13.9 
Change in valuation allowance— (123.4)16.3 
Deferred tax rate change(0.3)0.2 (0.2)
Voxbone US 338(g) gain— — (8.9)
Intangibles and deferred adjustments— — (40.2)
Foreign rate differential— — 1.3 
Other(1.6)0.3 4.5 
Total116.4 %(51.8)%12.3 %
The following table presents the significant components of the Company’s net deferred tax liability:
As of December 31,
20202021
(In thousands)
Deferred tax assets:
Allowance for doubtful accounts$134 $262 
Accrued liabilities3,478 3,412 
Operating lease liabilities4,878 3,456 
Deferred revenue1,702 1,880 
Stock-based compensation - deferred tax asset1,968 2,278 
OID9,433 8,848 
Tax credits7,270 9,214 
Net operating losses47,385 50,285 
Other deferred tax assets2,207 4,166 
Total deferred tax assets78,455 83,801 
Less: valuation allowance(37,771)(32,224)
Net deferred tax assets40,684 51,577 
Deferred tax liabilities:
Property and equipment8,038 7,813 
Goodwill989 1,130 
Intangibles60,667 49,470 
Operating lease assets4,092 2,860 
Debt27,766 38,411 
Other liability137 289 
Total deferred tax liabilities101,689 99,973 
Net deferred tax liability$(61,005)$(48,396)

The Company’s accounting for deferred taxes involves the evaluation of a number of factors concerning the realizability of its net deferred tax assets. The Company primarily considered the historic performance of Bandwidth, the nature of the Company’s deferred tax assets and the timing, likelihood and amount, if any, of future taxable income during the periods in which those temporary differences and carryforwards become deductible. Based on an analysis of these factors, the Company maintained that in 2021 a valuation allowance against US deferred tax assets was required.
As of December 31, 2021, the Company had approximately $195.5 million in US federal net operating loss carryforwards, $5.6 million in UK loss carryforwards, and $9.2 million in federal tax credits. All US federal net operating loss carryforwards were generated after the enactment of the Tax Cuts and Jobs Act (the “Act”) and as such do not expire, but can only be utilized to offset up to 80% of taxable income in any given year. The federal tax credits start to expire at various dates beginning in 2032.
As of December 31, 2021, the Company had approximately $138.1 million in state net operating loss carryforwards. If not utilized, some state net operating loss carryforwards will expire at various dates beginning in 2023.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
Year Ended December 31,
20202021
(In thousands)
Unrecognized tax benefits—January 1,$1,398 $2,414 
Gross increases—tax positions in prior period402 — 
Gross increases—tax positions in current period614 648 
Unrecognized tax benefits—December 31,$2,414 $3,062 
If the $3.1 million of unrecognized tax benefit is recognized, it would not impact the effective tax rate due to the valuation allowance on the Company's net U.S. deferred tax assets.
The Company has not incurred any material tax interest or penalties with respect to income taxes in the years ended December 31, 2020 and 2021.
The Company expects no material changes in the twelve months following December 31, 2021 in its uncertain tax positions.
The Company files U.S. federal income tax returns as well as income tax returns in many U.S. states and foreign jurisdictions. The tax years 2018 - 2020 remain open to examination by the major jurisdictions in which the Company is subject to tax.