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Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company files a consolidated federal income tax return with its wholly owned U.S. subsidiaries.
The income tax expense consisted of the following (in thousands):
 Year ended December 31,
 202220212020
Current income tax:
Federal$— $— $— 
State2,531 2,359 2,174 
Foreign1,230 3,641 764 
Total3,761 6,000 2,938 
Deferred income tax:
Federal— — — 
State251 (263)(851)
Foreign(1,662)(3,266)(1,004)
Total(1,411)(3,529)(1,855)
Income tax expense$2,350 $2,471 $1,083 
The following reconciles the tax benefit computed at the statutory federal rate and the Company’s tax expense (in thousands):
 Year ended December 31,
 202220212020
Computed expected tax benefit$(10,370)$(63,647)$(126,472)
State income taxes, net of federal tax effect2,222 1,556 882 
Foreign income taxes20 221 (383)
Other reconciling items1,349 (1,235)(714)
Sale of Vivint Canada, Inc. (5,279)— — 
Capital Loss Limitation(6,831)— — 
Permanent differences(2,520)(8,753)36,423 
Excess deductible compensation limitation17,481 10,463 9,667 
Change in valuation allowance6,278 63,866 81,680 
Income tax expense$2,350 $2,471 $1,083 
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities were as follows (in thousands): 
 December 31,
 20222021
Gross deferred tax assets:
Net operating loss carryforwards$510,274 $546,693 
Deferred subscriber income349,187 326,759 
Interest expense limitation161,408 142,919 
Accrued expenses and allowances52,010 56,495 
Capitalized Research and Experimental Expenses13,917 — 
Lease liabilities 10,761 13,356 
Purchased intangibles and deferred financing costs8,690 9,687 
Inventory reserves2,083 1,859 
Research and development credits41 41 
Deferred capitalized contract costs— 1,800 
Property and equipment1,672 1,888 
Valuation allowance(737,374)(740,397)
Total372,669 361,100 
Gross deferred tax liabilities:
Deferred capitalized contract costs(364,406)(346,887)
Right of use assets(9,153)(11,430)
Purchased intangibles and deferred financing costs— (959)
Property and equipment— (443)
Total(373,559)(359,719)
Net deferred tax assets (liabilities)$(890)$1,381 
The Company had gross operating loss carryforwards as follows (in thousands):
 December 31,
 20222021
Net operating loss carryforwards:
Federal$2,093,641 $2,229,000 
States1,827,793 2,036,000 
Total$3,921,434 $4,265,000 
U.S. federal net operating loss carryforwards will begin to expire in 2029, if not used. State net operating losses, depending on jurisdiction either expire over varying carryover periods, some of which have already begun to expire, and other states where the Company has net operating loss carryovers have an indefinite carryover provision. The Company had U.S. research and development credits of approximately $41,000 at December 31, 2022, and December 31, 2021, which begin to expire in 2030.
Realization of the Company’s federal and state net operating loss carryforwards and tax credits is dependent on generating sufficient taxable income prior to their expiration. The Company performed a study to determine the amount of any limitation on its net operating losses and concluded that as of December 31, 2022 an ownership change had not occurred under the provisions of Internal Revenue Code Section 382, and as of that date the losses were not limited. The future use of the net operating loss carryforwards may have limitations resulting from future ownership changes or other factors under Section 382 of the Internal Revenue Code.
At December 31, 2022 and 2021, the Company recorded a valuation allowance against its U.S. federal and state net deferred tax assets as it believes it is more likely than not that these benefits will not be realized. Significant judgment is required in determining the Company’s provision for income taxes, recording valuation allowances against net deferred tax assets and evaluating the Company’s uncertain tax positions. The Company has considered and weighed the available evidence, both positive and negative, to determine whether it is more likely than not that some portion, or all, of the deferred tax assets
will not be realized. Based on available information, management does not believe it is more likely than not that all of its deferred tax assets will be utilized. The Company recorded a valuation allowance against U.S. net deferred tax assets of approximately $737.4 million and $740.4 million at December 31, 2022 and 2021, respectively.

The Company is no longer subject to income tax examination by the U.S. federal, state or local tax authorities for years ended December 31, 2017 or prior; however, its tax attributes, such as NOL carryforwards and tax credits, are still subject to examination in the year they are used.

As of December 31, 2022 and 2021, the Company has not recognized any uncertain tax positions.