Tesla 2016 Annual Report Download - page 72

ReconciliationofstatutoryfederalincometaxestooureffectivetaxesfortheyearsendedDecember31,2015,2014and2013isasfollows(inthousands):
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Year Ended December 31,
  2015 2014 2013
Taxatstatutoryfederalrate  $ (306,470)  $ (99,622) $ (25,001)
Statetax,netoffederalbenefit   525   257  178
Nondeductibleexpenses   16,711   15,238  733
Foreignincomeratedifferential   172,259   86,734  (253)
U.S.taxcredits   (43,911)  (26,895)  (6,682)
Otherreconcilingitems   1,232   877  1,317
Changeinvaluationallowance   172,693   32,815  32,296
Provisionforincometaxes  $ 13,039  $ 9,404 $ 2,588
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AsofDecember31,2015,werecordedavaluationallowanceof$668.4millionfortheportionofthedeferredtaxassetthatwedonotexpecttoberealized.
Thevaluationonournetdeferredtaxesincreasedby$144.0millionduringtheyearendedDecember31,2015,primarilyduetoadditionalU.S.deferredtaxassets
incurredinthecurrentyearthatcannotberealized.Managementbelievesthatbasedontheavailableinformation,itismorelikelythannotthattheU.S.deferred
taxassetswillnotberealized,suchthatafullvaluationallowanceisrequiredagainstallU.S.deferredtaxassets.TheCompanyhasnet$3.3millionofdeferredtax
assetsinforeignjurisdictionswhichitbelievesaremore-likely-than-nottobefullyrealizedgiventheexpectationoffutureearningsinthesejurisdictions.
AsofDecember31,2015,wehadapproximately$2.14billionoffederaland$1.36billionofstatenetoperatinglosscarry-forwardsavailabletooffset
futuretaxableincome,whichwillbegintoexpireforfederalin2024and2019forstatepurposes.Theportionofnetoperatinglosscarryforwardsrelatedtostock
optionsisapproximately$867.2millionand$379.8millionforfederalandstatepurposes,respectively,ofwhichthetaxbenefitswillbecreditedtoadditionalpaid-
incapitalwhenrealized.Wehaveresearchanddevelopmenttaxcreditsofapproximately$58.6millionand$62.0millionforfederalandstateincometaxpurposes,
respectively.Ifnotutilized,thefederalcarry-forwardswillexpireinvariousamountsbeginningin2019.However,thestateresearchanddevelopmenttaxcredits
canbecarriedforwardindefinitely.Inaddition,wehaveothergeneralbusinesstaxcreditsofapproximately$29.9millionforfederalincometaxpurposes,which
willbegintoexpirein2034.
NodeferredtaxliabilityhasbeenrecognizedfortheremittanceofanyundistributedforeignearningstotheUnitedStatessincetheCompanyhasno
materialamountofundistributedforeignearningsoutsideofourU.S.taxjurisdictionasofDecember31,2015.
Federalandstatelawscanimposesubstantialrestrictionsontheutilizationofnetoperatinglossandtaxcreditcarry-forwardsintheeventofan“ownership
change,”asdefinedinSection382oftheInternalRevenueCode.Wedeterminedthatnosignificantlimitationwouldbeplacedontheutilizationofournet
operatinglossandtaxcreditcarry-forwardsduetoanypriorownershipchanges.
Uncertain Tax Positions
TheaggregatechangesinthebalanceofourgrossunrecognizedtaxbenefitsduringtheyearsendedDecember31,2015,2014and2013wereasfollows(in
thousands):

December31,2012   18,070
Decreasesinbalancesrelatedtoprioryeartaxpositions   (7,802)
Increasesinbalancesrelatedtocurrentyeartaxpositions   3,102
December31,2013   13,370
Increaseinbalancesrelatedtoprioryeartaxpositions   56
Increasesinbalancesrelatedtocurrentyeartaxpositions   27,951
December31,2014   41,377
Increaseinbalancesrelatedtoprioryeartaxpositions   6,626
Increasesinbalancesrelatedtocurrentyeartaxpositions   51,124
December31,2015  $ 99,127
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