9. Income Taxes

On December 22, 2017, the Tax Cuts and Jobs Act ("Tax Act") was enacted. The Tax Act significantly revises the U.S. corporate income tax law by, among other things, decreasing the federal corporate income tax rate from 35% to 21% effective January 1, 2018. As a result of the reduction in the corporate income tax rate, the Company was required to remeasure its deferred tax assets and deferred tax liabilities on the enactment date using the new rate.

SEC Staff Accounting Bulletin No. 118 (SAB 118) addresses situations when a company has not completed the accounting for certain income tax effects of the Tax Act and provides a measurement period of up to one year after the enactment date for the accounting to be completed. Companies are required to report provisional amounts for income tax effects of the Tax Act for which the accounting is incomplete but a reasonable estimate can be determined.

As of December 31, 2017 the Company has substantially completed the accounting for the tax effects of the Tax Act. The Company has recognized provisional adjustments for the revaluation of deferred tax assets and deferred tax liabilities to reflect the reduced rate that will apply in future periods when these deferred taxes are settled and realized. Although the tax rate reduction is known, the Company has not fully collected all of the necessary data to complete the analysis of the effect of the Tax Act on the underlying deferred taxes and as such, the amounts recorded as of December 31, 2017 are provisional. Any subsequent adjustment to these amounts, if any, will be recorded to provision for income taxes during 2018.

During the year ended December 31, 2017, the Company recorded a provisional credit to federal tax expense of $2.4 million from remeasuring deferred tax assets and  deferred tax liabilities due to the Tax Act.

The actual impact of the Tax Act on effective tax rates and deferred tax assets and liabilities may differ from these estimates due to changes in interpretations and assumptions made in determining these estimates, future guidance issued by the IRS and the completion of the Company's U.S. tax return.

The provision for income taxes consists of the following for the years ended December 31, 2017, 2016 and 2015, all dollars are in thousands:

 

The effective tax rate for the years ended December 31, 2017, 2016 and 2015 differs from the U.S. federal statutory rate primarily as a result of certain non‑deductible expenses and state and local income taxes, and for 2017, due to the remeasurement of net deferred tax liabilities upon enactment of the Tax Act.

 

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for income tax reporting purposes.

In assessing the realization of deferred tax assets, management considers the reversal of deferred tax liabilities as well as projections of future taxable income during the periods in which temporary differences are expected to reverse. Based on the consideration of these facts, the Company believes it is more likely than not that all of its gross deferred tax assets will be realized in the future, and as a result has not recorded a valuation allowance on these amounts as of December 31, 2017 and 2016.

The components of deferred income tax assets and deferred tax liabilities were as follows at December 31, 2017 and  2016, all dollars are in thousands:

 

As of December 31, 2017, for Federal tax purposes, the Company has estimated net operating loss carryforwards of $5.5 million of which $1.7 million will expire in 2036 and $3.8 million will expire in 2037.

from 2016 and $3.8 million from 2017 that will expire in 2036 and 2037 respectively.

The Company has analyzed its tax positions for all open years (December 31, 2013, 2014, 2015 and 2016) and has concluded that no additional provision for income tax is required in the financial statements. The Company did not record any amounts at December 31, 2017, 2016 or 2015 related to uncertain tax positions or tax contingencies.