eBay 1998 Annual Report Download - page 72

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eBAY INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
72
Note 7—Income Taxes:
Income before income taxes was generated entirely by domestic operations during 1996, 1997 and 1998. The
provision for income taxes consists of the following, (in thousands):
Year Ended
December 31,
1996 1997 1998
Current:
Federal........................................................................................................... $ 40 $ 450 $2,309
State and local ............................................................................................... 11 117 877
51 567 3,186
Deferred:
Federal........................................................................................................... 47 87 1,245
State and local ............................................................................................... 8 15 201
55 102 1,446
$ 106 $ 669 $4,632
The following is a reconciliation of the difference between the actual provision for income taxes and theprovision
computed by applying the federal statutory rate of 34% to income before income taxes, (in thousands):
Year Ended
December 31,
1996 1997 1998
Provision at statutory rate........................................................................................ $ 87 $ 525 $2,390
Permanent differences:
Acquisition related expenses ........................................................................... — — 384
Stock compensation......................................................................................... — — 1,051
Tax exempt interest income............................................................................. — — (175)
Other................................................................................................................ — 12 270
State taxes, net of federal benefit ............................................................................ 19 132 712
$ 106 $ 669 $4,632