Income Taxes |
9 Months Ended |
|---|---|
Sep. 30, 2017 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes |
Income Taxes
The Company is subject to U.S. federal income tax as well as income tax of foreign and state tax jurisdictions. The tax years 2013-2016 remain open to examination by the major taxing jurisdictions to which the Company is subject, except the Internal Revenue Service for which the tax years 2014-2016 remain open.
For the thirteen and thirty-nine weeks ended September 30, 2017 the effective tax rate for the Company's continuing operations was 3% and (906)%, respectively. The effective tax rate for the thirteen and thirty-nine weeks ended September 30, 2017 differed from the U.S. federal statutory rate primarily as a result of the partial release of the valuation allowance maintained against the Company's gross deferred tax assets.
As of December 31, 2016, the Company’s deferred tax assets were primarily the result of U.S. federal and state net operating loss carryforwards. A valuation allowance of $46,775 was recorded against its gross deferred tax asset balance as of December 31, 2016. As of the end of the second quarter of 2017, management determined that sufficient positive evidence existed to conclude that it was more likely than not that deferred taxes of $27,248 were realizable, and therefore, reduced the valuation allowance accordingly.
As of each reporting date, the Company’s management considers new evidence, both positive and negative, that could impact management’s view with regard to future realization of deferred tax assets. For the thirteen weeks ended September 30, 2017, there was no material change in the amount of the Company's deferred tax assets that are more likely than not to be realized in future years.
For the thirteen and thirty-nine weeks ended October 1, 2016, the effective tax rate for the Company's continuing operations was (0.6)% and 2.7%, respectively. The effective tax rate for the thirteen and thirty-nine weeks ended October 1, 2016 differed from the U.S. federal statutory rate primarily as a result of the recording of valuation allowance against the pre-tax losses that was offset by the tax benefit resulting from the reduction of excess book basis in the Company's investment in AutoMD over its tax basis due to AutoMD's pre-tax losses.
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