Entity information:
NOTE
12
–
INCOME TAXES
 
We
did
not
have any provision for income taxes for the years ended
December 31, 2017,
2016
and
2015.
 
The items accounting for differences between income taxes computed at the federal statutory rate and the provision recorded for income taxes are as follows:
 
   
Year Ended December 31,
  
   
2017
    
2016
    
2015
  
                         
Income taxes computed at the federal statutory rate
   $
(5,241,627
 )   $
(2,555,151
 )   $
(793,904
 )
Effect of:
                        
(Income) loss taxed as partnership
    
(552,081
 )    
2,555,151
      
793,904
  
State taxes, net of federal benefits
    
(610,495
 )    
—
      
—
  
Change in valuation allowance
    
4,464,141
      
—
      
—
  
Change in enacted tax rates
    
2,119,340
      
—
      
—
  
Change in tax status    
(205,453
 )    
—
      
—
  
Other, net
    
26,175
      
—
      
—
  
Total
   $
—
     $
—
     $
—
  
 
Deferred tax assets and liabilities are as follows:
 
   
December 31,
  
   
2017
    
2016
  
                 
Deferred tax assets:
                
Loss carryforwards U.S. - Federal/States
   $
13,499,628
     $
—
  
Asset retirement obligations
    
3,178,064
      
—
  
Equity-based compensation
    
802,843
      
—
  
Total deferred tax assets
    
17,480,535
      
—
  
Less valuation allowance
    
(4,464,141
 )    
—
  
Deferred tax assets, net
    
13,016,394
      
—
  
                 
Deferred tax liabilities:
                
Property, plant & equipment
    
(13,016,394
 )    
—
  
Net deferred tax assets, net of valuation allowance
   $
—
     $
—
  
 
As of
December 
31,
2017,
our federal and state net operating loss carryforwards for income tax purposes were approximately
$52.4
million and
$42.0
million, respectively. If
not
utilized, the federal and state net operating loss carryforwards will expire in
2037.
A valuation allowance has been recorded against our deferred tax assets given our limited operating history.
 
Tax Cuts and Jobs Act
 
On
December 22, 2017
, the U.S. Government enacted comprehensive tax legislation referred to as the Tax Cuts and Jobs Act (the “Act”). The Act makes broad and complex changes to the U.S. tax code, including but
not
limited to, reducing the U.S. federal corporate rate from
35%
to
21%,
allowing full expensing of qualified property acquired and placed in service after
September 27, 2017
and imposing new limits on the deduction of net operating losses, executive compensation and net interest expense. There was
no
impact of the Act on our
2017
financial statements as t
he revaluation of our deferred tax assets and liabilities of
$2.1
 million was offset by the valuation allowance.