INCOME TAXES

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

18. INCOME TAXES

The following table summarizes the loss before the provision (benefit) for income taxes by jurisdiction for the periods indicated:

	For the Year Ended December 31,
	2022			2021			2020
	(in thousands)
Domestic	$	(251,384	)	$	(47,633	)	$	(204,956	)
Foreign		(438,579	)		(371,315	)		(348,109	)
Total	$	(689,963	)	$	(418,948	)	$	(553,065	)

The following table summarizes provision (benefit) for income taxes in the accompanying consolidated financial statements for the periods indicated:

	For the Year Ended December 31,
	2022			2021			2020
	(in thousands)
Current provision:
Federal	$	—		$	—		$	4
State		13,193			(40	)		624
Foreign		944			181			680
Total current provision		14,137			141			1,308
Deferred benefit:
Federal		—			—			—
State		—			—			—
Foreign		(612	)		(309	)		(245	)
Total deferred benefit		(612	)		(309	)		(245	)
Total income tax expense (benefit)	$	13,525		$	(168	)	$	1,063

The following table summarizes the reconciliation between the Company’s effective tax rate and the statutory income tax rate for each of the periods indicated:

	For the Year Ended December 31,
	2022				2021				2020
Federal income tax rate		21.0		%		21.0		%		21.0		%
State taxes		4.1				0.4				0.6
Research and development and other tax    credits		6.9				10.0				10.1
Valuation allowance		(14.7	)			(9.8	)			(21.3	)
Permanent differences		(3.3	)			(0.3	)			(1.6	)
Stock-based compensation		(1.2	)			(3.0	)			3.5
Foreign rate differential		(13.2	)			(18.4	)			(12.9	)
Other		(1.6	)			0.1				0.4
Effective tax rate		(2.0	)	%		(0.0	)	%		(0.2	)	%

Permanent differences affecting the Company’s effective tax rate primarily include the premium paid to repurchase a portion of the 2024 Notes, excess stock-based compensation tax deductions, net of non-deductible stock-based compensation and limitation on deductibility of officer compensations.

The following table summarizes the analysis of the deferred tax assets and liabilities for each of the periods indicated:

	As of December 31,
	2022			2021
	(in thousands)
Deferred tax assets:
Net operating loss carryforwards	$	241,826		$	330,392
Difference in depreciation and amortization		39,725			31,563
Research and development tax credits		261,067			201,512
Stock-based compensation		80,193			38,132
Lease liabilities		11,782			10,890
Capitalized inventory		33,366			24,172
Debt discount		35,975			5,875
Capitalized research and development costs		74,886			—
Other		44,022			38,315
Total deferred tax assets		822,842			680,851
Deferred tax liabilities:
Right of use asset		(9,174	)		(7,405	)
Debt discount		—			—
Total deferred tax liabilities		(9,174	)		(7,405	)
Valuation allowance		(811,908	)		(672,319	)
Net deferred tax assets	$	1,760		$	1,127

For tax years beginning on or after January 1, 2022, the Tax Cuts and Jobs Act of 2017 eliminates the option to currently deduct research and development expenses and requires taxpayers to capitalize and amortize the costs over five years for research activities performed in the United States and 15 years for research activities performed outside the United States. The provision required the Company to record a current state tax expense of $13.2 million primarily due to the temporary suspension of utilizing net operating loss carryforwards in certain states the Company operates in.

The Company has evaluated the positive and negative evidence bearing upon the realizability of its U.S. net deferred tax assets, which are comprised principally of federal and state net operating loss carryforwards, research and development tax credit carryforwards, capitalized research and development costs, stock-based compensation expense, capitalized inventory, and intangibles. Under the applicable accounting standards, management has considered the Company’s history of losses and concluded that it is more likely than not that the Company will not recognize the benefits of net federal and state deferred tax assets. Accordingly, a full valuation allowance against the U.S. net deferred tax asset is maintained at December 31, 2022 and 2021. The net change in the valuation allowance for deferred tax assets was an increase of $139.6 million and $66.5 million for the years ended December 31, 2022 and 2021, respectively. This increase for the year ended December 31, 2022 was primarily due to the generation of federal and state income tax credits, an increase in equity compensation, capitalized research and development costs and an increase in the debt discount deferred tax asset as a result of the integration of the 2022 Capped Calls associated with the 2027 Notes, which from a tax perspective resulted in an increase to the valuation allowance which was recorded through equity.

The Company generated foreign deferred tax assets mainly consisting of net operating loss carryforwards, stock-based compensation and unrealized gain/losses. Based upon the income projections in the majority of the foreign jurisdictions, the Company believes it will realize the benefit of its future deductible differences in these jurisdictions. As such, the Company has not recorded a valuation allowance against these foreign jurisdictions. Brazil and the Netherlands have generated deferred tax assets, which consist primarily of net operating loss carryforwards. The Company has concluded that it is more likely than not that we will not recognize the future benefits of the deferred tax assets in these jurisdictions, and accordingly, a full valuation allowance has been recorded against these foreign deferred tax assets.

As of December 31, 2022, the Company had federal and state net operating loss carryforwards of $925.7 million and $616.2 million, respectively, available to reduce future taxable income. Federal and state net operating loss carry forwards of $229.8 million and $572.0 million will expire at various dates between 2023 and 2041. Federal and state net operating loss carryforwards of $695.9 million and $44.2 million, respectively, can be carried forward indefinitely. Utilization of these net operating losses could be limited under Section 382 of the Internal Revenue Code and similar state laws based on historical or future ownership changes and the value of the Company’s stock. Additionally, the Company has $180.1 million and $102.4 million of federal and state research and development credits, respectively, available to offset future taxable income. These federal and state research and development credits begin to expire between 2023 and 2042 and between 2023 and 2037, respectively. The Company also has foreign net operating loss

carryforwards of $15.3 million, mainly derived from the net operating loss generated by its subsidiary in Brazil, which may be carried forward indefinitely.

The Company, or one of its subsidiaries, files income tax returns in the U.S., and various state and foreign jurisdictions. The federal, state and foreign income tax returns are generally subject to tax examinations for the tax years ended December 31, 2019 through December 31, 2022. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service, state or foreign tax authorities to the extent utilized in a future period.

The follow table summarizes the reconciliation of the beginning and ending amount of total unrecognized tax benefits for each of the periods indicated:

	For the Year Ended December 31,
	2022			2021			2020
	(in thousands)
Balance at beginning of the period	$	53,815		$	48,475		$	41,753
Increase related to current year tax positions		8,079			5,503			6,722
Increase related to prior year tax positions		—			—			—
Decrease related to prior year tax positions		(190	)		(163	)		—
Balance at end of the period	$	61,704		$	53,815		$	48,475

The balance of total unrecognized tax benefits at December 31, 2022, if recognized, would not affect the effective tax rate on income from continuing operations, due to a full valuation allowance against the Company’s U.S. deferred tax assets. The Company does not expect that the amount of unrecognized tax benefits to change significantly in the next twelve months. The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. It had no accrual for interest or penalties on its consolidated balance sheets at December 31, 2022 or 2021. No interest and/or penalties were recognized in 2022 or 2021.

The Company’s intent is to only make distributions from non-U.S. subsidiaries in the future when they can be made at no net tax cost. Otherwise, the Company considers all of its foreign earnings to be permanently reinvested outside of the U.S. and has no plans to repatriate these foreign earnings to the U.S. The Company has no material unremitted earnings from its non-U.S. subsidiaries.

Effective December 31, 2021, the Company adopted a policy to account for Global Intangible Low-Taxed Income ("GILTI") as a period cost under the Tax Cuts and Jobs Act.