Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

The income tax expense consisted of the following (in thousands):


	Year ended December 31,
	2022		2021		2020
Current income tax:
Federal	$	—	$	—	$	—
State	2,531		2,359		2,174
Foreign	1,230		3,641		764
Total	3,761		6,000		2,938
Deferred income tax:
Federal	—		—		—
State	251		(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

Schedule of Reconciliation of Tax Expense Computed at Statutory Federal Rate and Company's Tax Expense

The following reconciles the tax benefit computed at the statutory federal rate and the Company’s tax expense (in thousands):


	Year ended December 31,
	2022		2021		2020
Computed expected tax benefit	$	(10,370)	$	(63,647)	$	(126,472)
State income taxes, net of federal tax effect	2,222		1,556		882
Foreign income taxes	20		221		(383)
Other reconciling items	1,349		(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 limitation	17,481		10,463		9,667
Change in valuation allowance	6,278		63,866		81,680
Income tax expense	$	2,350	$	2,471	$	1,083

Schedule of Significant Portions of Deferred Tax Assets and Liabilities

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,
	2022		2021
Gross deferred tax assets:
Net operating loss carryforwards	$	510,274	$	546,693
Deferred subscriber income	349,187		326,759
Interest expense limitation	161,408		142,919
Accrued expenses and allowances	52,010		56,495
Capitalized Research and Experimental Expenses	13,917		—
Lease liabilities	10,761		13,356
Purchased intangibles and deferred financing costs	8,690		9,687
Inventory reserves	2,083		1,859
Research and development credits	41		41
Deferred capitalized contract costs	—		1,800
Property and equipment	1,672		1,888
Valuation allowance	(737,374)		(740,397)
Total	372,669		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

Summary of Net Operating Loss Carryforwards

The Company had gross operating loss carryforwards as follows (in thousands):


	December 31,
	2022		2021
Net operating loss carryforwards:
Federal	$	2,093,641	$	2,229,000
States	1,827,793		2,036,000


Total	$	3,921,434	$	4,265,000