We are primarily subject to U.S. federal and California state jurisdictions. To our knowledge, all tax years remain open to examination by U.S. federal and state authorities.
In addition, in accordance with authoritative guidance, we are required to recognize the impact of an uncertain tax position in the consolidated financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. An uncertain tax position will not be recognized if it has less than a 50% likelihood of being sustained upon examination by the tax authorities. We had no unrecognized tax benefits from uncertain tax positions as of April 30, 2017 and 2016. It is also our policy, in accordance with authoritative guidance, to recognize interest and penalties related to income tax matters in interest and other expense in our consolidated statements of operations and comprehensive loss. We did not recognize interest or penalties related to income taxes for fiscal years ended April 30, 2017, 2016, and 2015, and we did not accrue for interest or penalties as of April 30, 2017 and 2016.
At April 30, 2017, we had net deferred tax assets of $178,400,000. Due to uncertainties surrounding our ability to generate future taxable income to realize these tax assets, a full valuation has been established to offset our net deferred tax assets. Additionally, the future utilization of our net operating loss carry forwards to offset future taxable income may be subject to an annual limitation, pursuant to Internal Revenue Code Section 382, as a result of ownership changes that may have occurred previously or that could occur in the future. A Section 382 analysis was completed as of the fiscal year ended April 30, 2017 and it was determined that no change in ownership had occurred. Ownership changes occurring subsequent to April 30, 2017 may impact the utilization of net operating loss carry forwards and other tax attributes.
At April 30, 2017, we had federal net operating loss carry forwards of approximately $391,878,000. The net operating loss carry forwards expire in fiscal years 2019 through 2037. We also have California state net operating loss carry forwards of approximately $263,812,000 at April 30, 2017, which begin to expire in fiscal year 2018. In addition, we have approximately $5,956,000 of net operating loss attributable to excess tax deductions on share-based compensation that when utilized, if any, the tax benefit will be booked to additional paid-in-capital.
The provision for income taxes consists of the following for the three years ended April 30,:
| 2017 | 2016 | 2015 | ||||||||||
| Federal income taxes at statutory rate | $ | (9,573,000 | ) | $ | (18,921,000 | ) | $ | (17,122,000 | ) | |||
| State income taxes | (2,264,000 | ) | (4,824,000 | ) | (4,450,000 | ) | ||||||
| Expiration and adjustments of deferred tax assets | 1,693,000 | 1,580,000 | 1,790,000 | |||||||||
| Change in valuation allowance | 10,005,000 | 21,871,000 | 19,532,000 | |||||||||
| Other, net | 139,000 | 294,000 | 250,000 | |||||||||
| Income tax (expense) benefit | $ | – | $ | – | $ | – | ||||||
Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts for income tax purposes. Significant components of our deferred tax assets and deferred tax liabilities at April 30, 2017 and 2016 are as follows:
| 2017 | 2016 | |||||||
| Share-based compensation | $ | 9,583,000 | $ | 8,806,000 | ||||
| Deferred revenue | 12,157,000 | 4,296,000 | ||||||
| Deferred rent | 738,000 | 470,000 | ||||||
| Other | 2,984,000 | 2,486,000 | ||||||
| Net operating losses | 154,030,000 | 152,746,000 | ||||||
| Total deferred tax assets | 179,492,000 | 168,804,000 | ||||||
| Less valuation allowance | (178,400,000 | ) | (168,395,000 | ) | ||||
| Total deferred tax assets, net of valuation allowance | $ | 1,092,000 | $ | 409,000 | ||||
| Deferred tax liabilities: | ||||||||
| Fixed assets | (1,092,000 | ) | (409,000 | ) | ||||
| Total deferred tax liabilities | (1,092,000 | ) | (409,000 | ) | ||||
| Net deferred tax assets | $ | – | $ | – | ||||