9. Income Taxes

Income Taxes

A reconciliation of income taxes computed at federal statutory rates to income tax expense is as follows (dollar amounts in thousands):

 

		Three Months Ended March 31,
		2018								2017
Benefit from income taxes at statutory rate		$	(770	)			21.0	%		$	(411	)			35.0	%
State and local income taxes, net of federal tax benefit			(78	)			2.1	%			(20	)			1.7	%
Stock based compensation			(22	)			0.6	%			(20	)			1.7	%
Foreign rate differential			(1,237	)			33.8	%			45				(3.8	)%
Research credits			18				(0.5	)%			59				(5.0	)%
Permanent non-deductible acquisition-related expense			(301	)			8.2	%			(245	)			20.9	%
Net (windfall) shortfall on stock based compensation			(117	)			3.2	%			471				(40.1	)%
Other, net			42				(1.1	)%			20				(1.8	)%
Reported income tax benefit		$	(2,465	)			67.3	%		$	(101	)			8.6	%

As of March 31, 2018, the reserve for uncertain tax positions was approximately $6.8 million. Of this amount, $4.6 million is recorded as a reduction of deferred tax assets and $2.2 million is classified as long-term liabilities.

As disclosed in the Company’s 2017 Form 10-K, the Company recorded the tax effects of the 2017 Tax Cuts and Jobs Act (TCJA) in the consolidated financial statements for the year ended December 31, 2017. The new legislation required the Company to pay tax on the unremitted earnings of its foreign subsidiaries through December 31, 2017. Because of the complexities involved in determining the previously unremitted earnings and profits of all our foreign subsidiaries, the Company is still in the process of obtaining, preparing, and analyzing the required information, as permitted in accordance with Staff Accounting Bulletin No. 118. The Company recorded an initial estimate of the tax on unremitted earnings of approximately $0.2 million, however, this amount was offset by available foreign tax credits, and as a result the net estimated amount payable related to the deemed repatriation of foreign earnings was zero. The Company is continuing to update this estimate, but does not expect there to be a material change in the estimate once it is finalized.