INCOME TAXES

The calculation of the effective tax rate is as follows (in thousands):



	Three months ended December 31,
	2017			2016
Loss before income taxes	$	(6,733	)	$	(1,741	)

Income tax benefit	(1,071		)	(1,441		)

Net loss	$	(5,662	)	$	(300	)

Effective tax rate	16		%	83		%

On December 22, 2017, the U.S. Tax Cuts and Jobs Act (the Act) was signed into law. The Act lowers the corporate tax rate for C corporations from 35% to 21% effective January 1, 2018. As a result, the effective tax rate for the three months ended December 31, 2017 represents a reduced blended U.S. tax rate of 24.5%, but was partially offset by deferred tax expense of $0.7 million due to the re-measurement of our U.S. deferred tax assets, which are not expected to be realized prior to the end of Fiscal 2018. The final impact of the Act may differ from our estimates based on changes in interpretations or assumptions we make, as well as the issuance of additional guidance. Additionally, our effective tax rate for the three months ended December 31, 2017 was reduced by a $0.2 million foreign tax loss which is reserved with a valuation allowance.

The effective tax rate for the three months ended December 31, 2016 was favorably impacted by the lower tax rate in the United Kingdom, the relative amounts of income/loss recognized in various jurisdictions, as well as the utilization of net operating loss carryforwards in Canada that are fully reserved with a valuation allowance. We also completed an IRS audit during the three months ended December 2016, which favorably impacted the effective tax rate due to the release of a $0.3 million FIN 48 reserve relating to the Research and Development Tax Credit.