J. INCOME TAXES

The following table summarizes our effective tax rate and income tax expense (benefit) for the three and six months ended June 30, 2016 and 2015 (in thousands except for percentages):


	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Effective tax rate		199	%		35	%		14	%		34	%
Income tax expense (benefit)	$	1,196		$	18,035		$	(1,344)		$	23,643

For the three and six months ended June 30, 2016, we recognized an income tax expense of $1.2 million and an income tax benefit $1.3 million, respectively, representing an effective tax rate of 199% and 14%, respectively. The difference between the expected statutory federal tax rate of 35% and the 199% effective tax rate for for the three months ended June 30, 2016, was primarily attributable to the impact of state income taxes, non-deductible stock compensation, non-deductible contingent consideration expense associated with Lumara Health, and other non-deductible expenses, partially offset by federal research and development and orphan drug tax credits. The effective tax rate for the three months ended June 30, 2016 reflected the significance of these permanent differences in relation to the pre-tax income for the three months ended June 30, 2016. The difference between the expected statutory federal tax rate of 35% and the 14% effective tax rate for the six months ended June 30, 2016, was primarily attributable to the impact of state income taxes and non-deductible stock compensation. The effective tax rates for the three and six months ended June 30, 2016, were also impacted by the impairment of the net intangible asset for the MuGard Rights and related contingent consideration fair value adjustment. We recorded a net tax benefit in the second quarter for these discrete events at a combined federal and state statutory income tax rate of 39%.

For the three and six months ended June 30, 2015, we recognized income tax expense of $18.0 million and $23.6 million, respectively, representing an effective tax rate of 35% and 34%, respectively. The difference between the expected statutory federal tax rate of 35% and the 34% effective tax rate for the six months ended June 30, 2015, was attributable to the impact of a valuation allowance release related to certain deferred tax assets, partially offset by the impact of state income taxes.