Green Dot 2010 Annual Report Download - page 80

Note 6 — Income Taxes (continued)
ended December 31, 2010. Excluding the impact of these discrete items, our effective tax rate would have
been 39.7%.
The tax effects of temporary differences that give rise to significant portions of our deferred tax assets
and liabilities were as follows:
December 31, 2010 December 31, 2009
(In thousands)
Deferred tax assets:
Reserve for overdrawn accounts . . . . . . . . . . . . . . . . $ 4,811 $ 3,280
State income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . (8) 479
Stock-based compensation . . . . . . . . . . . . . . . . . . . . 2,632 1,454
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 595 874
Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . 8,030 6,087
Deferred tax liabilities:
Internal-use software costs . . . . . . . . . . . . . . . . . . . . (3,254) (2,423)
Deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . (3,378) (2,697)
Property and equipment, net . . . . . . . . . . . . . . . . . . . (1,338) (487)
Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . (7,970) (5,607)
Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . $ 60 $ 480
Total net deferred tax assets and liabilities are included in our consolidated balance sheets as follows:
December 31, 2010 December 31, 2009
(In thousands)
Current net deferred tax assets . . . . . . . . . . . . . . . . . . $ 5,398 $ 4,634
Noncurrent net deferred tax liabilities . . . . . . . . . . . . . . (5,338) (4,154)
Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . $ 60 $ 480
In assessing whether a valuation allowance is needed for our deferred tax assets, we consider
whether it is more likely-than-not that some portion or all of the deferred tax assets will not be realized. The
ultimate realization of our deferred tax assets is dependent upon our generation of sufficient taxable
income of the appropriate character during the periods in which those temporary differences become
deductible. We consider the scheduled reversal of deferred tax liabilities and projected future taxable
income in making this assessment. Based upon the level of our historical taxable income and projections of
our future taxable income over the periods in which the temporary differences resulting in the deferred tax
assets are deductible, we believe it is more likely than not that we will realize the benefits of our deferred tax
assets. Accordingly, we recorded no valuation allowance as of December 31, 2010 or 2009.
As of December 31, 2010 and 2009, we had no unutilized net operating loss carryforwards.
In accounting for income taxes, we followed the guidance related to uncertainty in income taxes. The
guidance prescribes a comprehensive framework for the financial statement recognition, measurement,
presentation, and disclosure of uncertain income tax positions that we have taken or anticipate taking in a
tax return, and includes guidance on de-recognition, classification, interest and penalties, accounting in
interim periods, and transition rules. We have concluded that we have no significant unrecognized tax
benefits. We are subject to examination by the Internal Revenue Service, or IRS, and various state tax
authorities. Our consolidated federal income tax returns for the years ended July 31, 2005 and 2008 have
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GREEN DOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)