
	Year Ended January 31,
	2021		2020		2019
Current:
Federal	$	—	$	—	$	—
State	201		(5)		41
Foreign	1,081		571		340
Total current tax expense	$	1,282	$	566	$	381

Deferred:
Federal	$	—	$	(291)	$	—
State	—		—		—
Foreign	234		626		226
Total deferred tax expense	$	234	$	335	$	226
Total tax expense	$	1,516	$	901	$	607

A reconciliation of the Company’s effective income tax rate to the expected income tax rate, computed by applying the federal statutory income tax rate of 21.0% for each of the years ended January 31, 2021, 2020, and 2019, to the Company’s loss before provision for income taxes, is as follows:


	Year Ended January 31
	2021		2020		2019
Federal tax statutory rate	21.0	%	21.0	%	21.0	%
State tax, net of federal tax effect	2.1		3.2		—
Change in valuation allowance	(22.9)		(26.7)		(20.2)
Nondeductible expenses	(5.0)		(2.3)		(2.0)
Effect of foreign operations	(0.6)		(0.2)		(0.3)
Tax credits	4.5		6.5		1.4
Other	(1.0)		(2.5)		(1.2)
Total	(1.9)	%	(1.0)	%	(1.3)	%


	As of January 31,
	2021		2020
Deferred tax assets:
Accruals and reserves	$	3,455	$	1,946
Deferred revenue	746		1,367
Net operating loss carryforwards	89,595		80,432
Tax credit carryforwards	14,135		10,624
Stock-based compensation	5,465		2,700
Gross deferred tax assets	$	113,396	$	97,069
Less: valuation allowance	(110,223)		(92,214)
Total deferred tax assets	$	3,173	$	4,855

Deferred tax liabilities:
Property and equipment	$	(2,329)	$	(3,687)
Deferred sales commissions	(2,151)		(2,357)
Total deferred tax liabilities	$	(4,480)	$	(6,044)
Net deferred tax liabilities	$	(1,307)	$	(1,189)

A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized. Management believes that, based on a number of factors, it is more likely than not that the U.S. federal and state net deferred tax assets will not be fully realized, such that a full valuation allowance has been recorded. A valuation allowance of $110.2 million, $92.2 million, and $59.3 million has been established by the Company as of January 31, 2021, 2020, and 2019, respectively. The gross change in the valuation allowance during the years ended January 31, 2021, 2020, and 2019 was an increase of $18.0 million, $32.9 million, and $11.5 million, respectively, primarily due to current year losses.

As of January 31, 2021, the Company had net operating loss (“NOL”) carryforwards of $360.0 million for U.S. federal and $213.4 million for U.S. state income tax purposes available to offset future taxable income. The net operating losses generated during the year ended January 31, 2021 can be carried forward indefinitely for federal purposes. The federal net operating losses generated before the year ended January 31, 2019 carry forward for a 20-year period and if unutilized will begin to expire in 2030. The California net operating loss carryforwards begin to expire in 2030. The Company also had research tax credit carryforwards of $11.8 million for U.S. federal and $7.8 million for U.S. state income tax purposes. The federal research tax credits expire beginning in 2030, and the U.S. state tax credits can be carried forward indefinitely.

Internal Revenue Code Section 382 places a limitation (the “Section 382 Limitation”) on the amount of taxable income that can be offset by net operating loss carryforwards after a change in control (generally greater than a 50% change in ownership) of a loss corporation. Generally, after a control change, a loss corporation cannot deduct operating loss carryforwards in excess of the Section 382 Limitation. Due to these “change in ownership” provisions, utilization of the net operating loss and income tax credit carryforwards may be subject to an annual limitation regarding their utilization against taxable income in future periods. The Company may have had an ownership shift as a result of its IPO in September 2020 that would result in Section 382 limitations through January 31, 2021. However, the Company does not expect any resulting limitations on its ability to utilize its net operating loss or research tax carryovers.

The Company files income tax returns in the United States federal jurisdiction, several U.S. state jurisdictions, and various foreign jurisdictions. For jurisdictions in which tax filings are made, the Company is generally subject to income tax examination for all fiscal years since inception. Due to the Company’s net operating loss carryforwards, all tax years since inception remain subject to adjustment for U.S. federal and California tax returns. There are tax years which remain subject to examination in other U.S. state jurisdictions that are not material to the Company’s consolidated financial statements. In the Company’s major foreign jurisdictions – India and Poland – the tax years subsequent to 2016 remain open to examination.


	Year Ended January 31,
	2021		2020		2019
Unrecognized tax benefits, beginning of year	$	3,252	$	2,119	$	1,279
Increase related to prior year tax positions	66		382		279
Decreases related to prior year tax positions	—		(65)		—
Increases related to current year tax positions	895		816		561
Unrecognized tax benefits, end of year	$	4,213	$	3,252	$	2,119

As of January 31, 2021, the Company had $4.2 million of unrecognized tax benefits. Due to the Company’s full valuation allowance against all U.S. federal and state net deferred tax assets, the Company’s unrecognized tax benefits, if recognized, would not affect the effective tax rate. The Company recognizes interest accrued related to unrecognized tax benefits and penalties as income tax expense. Related to the unrecognized tax benefits noted above, the Company did not accrue any penalties or interest during the years ended January 31, 2021, 2020, and 2019.

The Company regularly assesses the likelihood of adverse outcomes resulting from examinations to determine the adequacy of its provision for income taxes, and monitors the progress of ongoing discussions with tax authorities and the impact, if any, of the expected expiration of the statute of limitations in various taxing jurisdictions. The Company believes that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in the Company’s tax audits are resolved in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs. Although the timing of the resolution or closure of audits is not certain, the Company does not believe that it is reasonably possible that its unrecognized tax benefits could change within the next 12 months.