Green Dot 2015 Annual Report Download - page 90

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84
Note 13—Income Taxes (continued)
Income tax expense differs from the amount computed by applying the statutory federal income tax rate to income
before income taxes. The sources and tax effects of the differences are as follows:
Year Ended December 31,
2015 2014 2013
U.S. federal statutory tax rate 35.0%35.0%35.0%
State income taxes, net of federal benefit 0.4 1.1 (0.2)
General business credits (0.9)(1.3)(2.3)
Employee stock-based compensation 0.8 0.7 1.4
Transaction costs (2.1)1.8 —
Other 0.7 0.7 1.2
Effective tax rate 33.9%38.0%35.1%
The decrease in the effective tax rate for the year ended December 31, 2015 as compared to the year ended
December 31, 2014 is primarily attributable to transaction costs.
The tax effects of temporary difference that give rise to significant portions of our deferred tax assets and liabilities
were as follows:
December 31,
2015 2014
(In thousands)
Deferred tax assets:
Net operating loss carryforwards $14,726 $15,172
Stock-based compensation 12,535 9,317
Reserve for overdrawn accounts 3,162 4,422
Accrued liabilities 6,206 5,866
Tax credit carryforwards 2,592 3,131
Other 2,531 2,151
Gross deferred tax assets 41,752 40,059
Valuation allowance ——
Total deferred tax assets, net of valuation allowance $41,752 $40,059
Deferred tax liabilities:
Internal-use software costs $17,955 $14,880
Property and equipment, net 1,669 3,924
Deferred expenses 4,730 5,856
Intangible assets 10,623 3,467
Gift card revenue 4,183 7,951
Other —1,708
Total deferred tax liabilities 39,160 37,786
Net deferred tax assets $2,592 $2,273
We establish a valuation allowance when we consider it more-likely-than-not that some portion or all of the deferred
tax assets will not be realized. As of December 31, 2015, we did not have a valuation allowance on any of our deferred
tax assets as we believed it was more-likely-than-not that we would realize the benefits of our deferred tax assets.
We are subject to examination by the Internal Revenue Service, or IRS, and various state tax authorities. Our
consolidated federal income tax returns for five-months ended December 31, 2009 and the years ended December
31, 2010, 2011 and 2012 are currently under examination by the IRS. We remain subject to examination of our federal
income tax returns for the years ended December 31, 2013 and 2014. We generally remain subject to examination of
our various state income tax returns for a period of four to five years from the respective dates the returns were filed.
As of December 31, 2015, we have net operating loss carryforwards of approximately $46.2 million and $35.1
million for federal and state tax purposes, respectively, which will be available to offset future income. If not used, these
carryforwards will expire between 2017 and 2035. In addition, we have state business tax credits of approximately