Stamps.com 2013 Annual Report Download - page 70

STAMPS.COM INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
As of December 31, 2013, we recorded approximately $40 million of net deferred tax assets, and we continued to maintain a valuation allowance
for the remainder of our gross deferred tax assets.
In making these determinations, we considered the available positive and negative evidence, including our recent earnings trend, expected future
taxable income and the federal and state effective tax rates related to the future taxable income. As of December 31, 2013, we continued to
maintain a valuation allowance for the remainder of our gross deferred tax assets.
In September 2008, the State of California passed legislation temporarily suspending the use of NOLs to offset current state income tax expense
for the tax years 2008 and 2009. In October 2010, the State of California passed legislation extending this suspension for tax years 2010 and
2011. During 2011 we were in a taxable loss position for tax reporting purposes. We recorded a current tax provision for corporate alternative
minimum federal taxes and state taxes of approximately $158,000, $565,000 and $0 during the years ended December 31, 2013, 2012 and 2011,
respectively. Total tax benefit recorded was approximately $9.6 million, $13.9 million and $8.5 million during the years ended December 31,
2013, 2012 and 2011, respectively.
Under the guidance related to uncertain tax positions, we are required to determine whether it is more likely than not that a tax position will be
sustained upon examination based on the technical merits of the position. A tax position that meets the more likely than not recognition threshold
is measured to determine the amount of liability or benefit to recognize in the financial statements.
In accordance with the guidance we have evaluated our research and development tax credits for uncertain tax positions. As of December 31,
2013 we have research and development tax credits totaling $5.8 million for Federal and California purposes.
The following is a tabular reconciliation of the total amounts of unrecognized tax benefits for the years ended December 31, 2013, 2012 and
2011 (in thousands):
Our policy is to recognize interest and penalties expense, if any, related to unrecognized tax benefits as a component of income tax expense. As
of December 31, 2013, we have not recorded any interest and penalty expense.
We remain subject to examination by the relevant tax authorities. These include the 2010 through 2012 tax years for federal purposes and the
2009 through 2012 tax years for California purposes.
F-20
Table of Contents
Unrecognized
Tax Benefits
Balance at December 31, 2010
$
(1,733
)
Reduction for tax positions of prior years
71
Addition for tax position of the current year
(83
)
Settlement
—
Balance at December 31, 2011
$
(1,745
)
Reductionfor tax positions of prior years
—
Addition for tax position of the current year
(160
)
Settlement
—
Balance at December 31, 2012
$
(1,905
)
Reductions for tax positions of prior years
—
Additions for tax position of the current year
(409
)
Settlement
—
Balance at December 31, 2013
$
(2,314
)