Income Taxes



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Provision for income taxes	$	9,027		$	379		$	20,148		$	983
Effective tax rate	37		%	3		%	32		%	4		%

The effective tax rate for the three months ended September 30, 2017 reflects the tax benefit of stock option exercises in the period and credits for research and development activity. During the three months ended September 30, 2016, we maintained a full valuation allowance on tax assets. The amount of the provision for that period reflects the Company’s estimated federal AMT and state tax liability.

The effective tax rate for the nine months ended September 30, 2017 reflects the tax benefit of stock option exercises in the period and credits for research and development activity. During the nine months ended September 30, 2016, we maintained a full valuation allowance on tax assets. The amount of the provision for that period reflects the Company’s estimated federal AMT and state tax liability.

Deferred income tax assets at September 30, 2017 consist of temporary differences primarily related to net operating loss carryforwards, stock-based compensation, and research and development tax credit carryforwards, partially offset by temporary differences related to intangible assets.

The Company files income tax returns in the U.S. federal jurisdiction and several states. Given that the company has incurred tax losses since its inception, all of the Company’s tax years are effectively open to examination. The Company has no amount recorded for any unrecognized tax benefits as of September 30, 2017. The Company regularly evaluates its tax positions for additional unrecognized tax benefits and associated interest and penalties, if applicable. There are many factors that are considered when evaluating these tax positions including: interpretation of tax laws, recent tax litigation on a position, past audit or examination history, and subjective estimates and assumptions. We reflect interest and penalties attributable to income taxes, to the extent they arise, as a component of income tax provision or benefit.