INCOME TAXES

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



	Three months ended December 31,
	2016			2015
Loss before income taxes	$	(1,741	)	$	(1,506	)

Income tax benefit	(1,441		)	(1,047		)

Net loss	$	(300	)	$	(459	)

Effective tax rate	83		%	70		%



	Three months ended December 31,
	2016		2015
Statutory rate	35	%	35	%
Foreign valuation allowance	15		(11	)
Research and development credit	22		45
State income taxes, net of federal benefit	2		3
Rate differential and other	9		(2	)
Effective tax rate	83	%	70	%

We recorded an income tax benefit of $1.4 million for the three months ended December 31, 2016, compared to an income tax benefit of $1.0 million for the three months ended December 31, 2015. Our income tax benefit reflects an effective tax rate on the pre-tax loss of 83% for the three months ended December 31, 2016 compared to 70% for the three months ended December 31, 2015. The effective tax rates for the first quarter of Fiscal 2017 and 2016 were 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 first quarter of Fiscal 2017 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 (R&D Tax Credit). The effective tax rate for the three months ended December 31, 2015 was also favorably impacted by a discrete item of $0.8 million related to the retroactive reinstatement of the R&D Tax Credit to January 31, 2016.