

	Year Ended December 31,
(in thousands)	2019			2018			2017
U.S. (loss) income	$	(21,644	)	$	1,429		$	(29,357	)
Foreign loss	(64,005		)	(72,586		)	(11,494		)
Total loss before income taxes	$	(85,649	)	$	(71,157	)	$	(40,851	)



	Year Ended December 31,
(in thousands)	2019			2018		2017
Current
Federal	$	(224	)	$	—	$	140
State	100			58		6
Foreign	9,245			2,306		898
Total current tax expense	9,121			2,364		1,044
Deferred
Foreign	4,243			—		(873		)
Total deferred tax expense (benefit)	4,243			—		(873		)
Total provision for income taxes	$	13,364		$	2,364	$	171

The items accounting for the difference between income taxes computed at the federal statutory rate and our effective tax rate were as follows:



	Year Ended December 31,
	2019		2018		2017
U.S. federal statutory tax rate	21.0	%	21.0	%	34.0	%
State and local taxes	4.8		(1.5	)	2.4
Research and development tax credit	3.1		1.9		3.0
Stock-based compensation	19.0		0.5		—
Uncertain tax positions	(0.5	)	(1.0	)	(0.2	)
Foreign tax rate differential	(7.9	)	(9.4	)	(4.0	)
Change in valuation allowance	(40.8	)	(12.6	)	2.7
Gain on sale of intellectual property	(12.3	)	—		—
Transition tax	—		—		(2.7	)
Revaluation of U.S. deferred income taxes	—		—		(34.5	)
Other	(2.0	)	(2.2	)	(1.1	)
Effective tax rate	(15.6	)%	(3.3	)%	(0.4	)%

We maintain a valuation allowance on U.S. federal, state and foreign net deferred tax assets as the realization of our deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain.



	December 31,
(in thousands)	2019			2018
Deferred tax assets:
Net operating losses	$	65,494		$	32,745
Deferred revenue	13,891			16,488
Stock-based compensation	10,032			5,581
Tax credits	7,585			5,320
Leases	10,451			2,436
Accrued compensation	918			697
Other	263			68
Total deferred tax assets	108,634			63,335
Valuation allowance	(82,237		)	(47,266		)
Net deferred tax assets	26,397			16,069
Deferred tax liabilities:
Deferred commissions	(15,003		)	(13,273		)
Property and equipment	(10,086		)	(2,166		)
Intangible assets	(919		)	(353		)
Other	(389		)	(277		)
Total deferred tax liabilities	(26,397		)	(16,069		)
Net deferred tax liabilities	$	—		$	—

At December 31, 2019, we had net operating loss (“NOL”) carryforwards for federal, state and foreign tax purposes of $186.0 million, $132.0 million, and $163.6 million, respectively, which will begin to expire in 2030, as well as $10.1 million of federal, state and foreign research and development tax credits, foreign tax credits, minimum tax credits and certain states’ job creation tax credits. The federal research and development and foreign tax credits will begin to expire in 2032 and the state job creation tax credits will begin to expire in 2020.

In December 2019, we sold acquired intellectual property through an intercompany transaction, which resulted in $6.3 million of current tax expense and $4.2 million of deferred tax expense in Israel.

In 2018, we recorded a deferred tax asset of $1.7 million related to our operating lease liability and recorded a deferred tax liability of $1.7 million related to our operating lease right-of-use asset due to the adoption of ASU 842. In connection with our IPO, we recorded a $1.9 million increase in our valuation allowance related to certain transaction costs.

We are currently subject to the annual limitation under Sections 382 and 383 of the Internal Revenue Code. We will not be precluded from realizing the NOL carryforward and tax credits but may be limited in the amount we could utilize in any given tax year in the event that the federal and state taxable income will exceed the limitation imposed by Section 382. The amount of the annual limitation is determined based on our value immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years.

At December 31, 2019 and 2018, the total amount of gross unrecognized tax benefits was $7.2 million and $4.8 million, respectively, which, if recognized, would impact our effective tax rate by less than $0.1 million in each year. Interest and penalties associated with uncertain tax positions recognized as a component of income tax expense were immaterial in 2019, 2018 and 2017.



	Year Ended December 31,
(in thousands)	2019			2018			2017
Unrecognized tax benefits at the beginning of the period	$	4,814		$	1,199		$	736
Additions for tax positions in the current year	2,306			3,571			446
Increase in prior year positions	90			102			30
Decrease in prior year positions	(89		)	(58		)	(13		)
Acquisitions	42			—			—
Unrecognized tax benefits at the end of the period	$	7,163		$	4,814		$	1,199

We file income tax returns in the United States, including various state jurisdictions. Our subsidiaries file income tax returns in various foreign jurisdictions. Tax years after 2014 remain open to examination by the major taxing jurisdictions in which we are subject to tax. At December 31, 2019, we were not under examination by the Internal Revenue Service or any state or foreign tax jurisdiction.

Depending on the jurisdiction, distributions of earnings could be subject to withholding taxes at rates applicable to the distributing jurisdiction. As we intend to continue to reinvest the earnings of foreign subsidiaries indefinitely, we have not provided for a U.S. income tax liability and foreign withholding taxes on undistributed foreign earnings of foreign subsidiaries. It is not practicable for us to determine the amount of unrecognized tax expense on these reinvested international earnings.