v3.24.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
 
Loss before income tax (benefit) provision for the years ended December 31, 2023, 2022 and 2021 consists of the following:
 
 Year ended December 31,
 202320222021
United States$(753,105)$(1,329,931)$(1,391,154)
Foreign(38,148)(113,027)(126,490)
Loss before income tax (benefit) provision$(791,253)$(1,442,958)$(1,517,644)
 
The components of the provision (benefit) for income taxes consists of the following:
 
 Year ended December 31,
 202320222021
Current:   
Federal$— $— $90 
State433 456 514 
Foreign3,888 5,085 23,174 
Total current provision4,321 5,541 23,778 
Deferred:
Federal205 (52,411)(5,523)
State2,643 (17,624)(2,075)
Foreign3,001 (3,372)(7,911)
Total deferred (benefit) provision5,849 (73,407)(15,509)
Total income tax (benefit) provision$10,170 $(67,866)$8,269 
 
The reconciliation between income taxes computed at the U.S. statutory income tax rate to our provision for income taxes for the years ended December 31, 2023, 2022 and 2021 is as follows:
 
 Year ended December 31,
 202320222021
Benefit for income taxes at 21% rate$(166,217)$(303,028)$(318,705)
Prior year provision true-ups1,321 938 (16,878)
State taxes, net of federal benefit(40,385)(17,265)(142,119)
Internal restructurings— — (167,692)
Stock-based compensation (benefit) expense26,155 28,015 (70,150)
Non-deductible lobbying expenses1,009 4,788 9,938 
Change in valuation allowance130,817 166,978 575,225 
Non-deductible executive compensation30,106 54,925 117,849 
(Gain) loss on remeasurement of warrant liabilities12,084 (6,173)(6,301)
Foreign rate differential3,348 1,802 16,588 
Income tax reserves4,119 (553)5,098 
Other7,813 1,707 5,416 
Total income tax provision (benefit)$10,170 $(67,866)$8,269 

Significant components of the Company’s deferred tax assets (liabilities) as of December 31, 2023 and 2022 are as follows:
 
 Year ended December 31,
 20232022
Deferred tax assets:  
Net operating loss carryforwards$1,042,874 $961,352 
Intangible assets82,813 72,299 
Accrual and other temporary differences59,656 57,281 
Operating lease24,784 18,213 
Stock-based compensation51,065 93,582 
Capitalized research and development costs128,719 61,584 
Fixed assets2,451 411 
Gross deferred tax assets1,392,362 1,264,722 
Valuation allowance(1,358,934)(1,228,117)
Net deferred tax assets$33,428 $36,605 
Deferred tax liabilities:
Capitalized software costs$(4,535)$(7,529)
Fixed assets(162)(3,590)
Operating lease(25,528)(16,102)
Other(7,798)(7,943)
Gross deferred tax liabilities(38,023)(35,164)
Total net deferred tax (liabilities) assets$(4,595)$1,441 
    
 
In assessing whether it is more likely than not that deferred tax assets will be realized, the Company considers all available evidence, both positive and negative, including its recent cumulative earnings or loss, experience and expectations of future available taxable income of the appropriate source and character by taxing jurisdiction, tax attribute carryback and carryforward periods available for tax purposes, and prudent and feasible tax planning strategies.

The Company records its deferred tax assets of $7.8 million and $10.7 million for 2023 and 2022, respectively, in deposits and other non-current assets and its deferred tax liabilities of $12.4 million and $9.3 million for 2023 and 2022, respectively, in other long-term liabilities in the consolidated balance sheets. The Company has provided a valuation allowance for the U.S. deferred tax assets as of December 31, 2023. For the year ended December 31, 2023, the U.S. valuation allowance increased by $130.8 million primarily due to the current year operating losses.
 
As of December 31, 2023, the Company had U.S. federal and state tax net operating loss (“NOL”) carryforwards of $3.8 billion and $4.1 billion, respectively, which may be available to offset future income tax liabilities. Of the federal net operating loss carryforward, $0.7 billion expires at various dates beginning in 2032 through 2037 and $3.1 billion does not expire. Of the state NOL carryforward, $3.9 billion expires at various dates beginning in 2024 through 2043 and $0.2 billion does not expire.

Utilization of the NOL carryforwards may be subject to limitation under Section 382 of the Internal Revenue Code of 1986 based on ownership changes that have occurred previously or that could occur in the future. These ownership changes may limit the amount of NOL and tax credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. There could be additional ownership changes in the future, which may result in additional limitations on the utilization of the NOL and tax credit carryforwards. The Company has analyzed the impact of these limitations on its attributes and included the impact of these limitations in its U.S. deferred tax assets.
 
As of December 31, 2023, foreign earnings of $5.7 million have been retained by the Company’s foreign subsidiaries for indefinite reinvestment. Upon repatriation of those earnings, in the form of dividends or otherwise, the Company could be subject to withholding taxes payable to the various foreign countries. Determination of the amount of unrecognized deferred income tax liability related to these outside basis differences is not practicable.

In addition to filing federal income tax returns, the Company files income tax returns in numerous states and foreign jurisdictions that impose an income tax. The Company is subject to U.S. federal, state and local income tax examinations by tax authorities for the years beginning in 2012. The Company is no longer subject to foreign income tax examinations for tax years prior to 2016.
 
The following table presents a reconciliation of the total amounts of unrecognized tax benefits, excluding interest and penalties, included in long-term income tax liabilities on the Company’s consolidated balance sheets:
 
 Year ended December 31,
 202320222021
Unrecognized tax benefits at the beginning of the year$58,011 $72,407 $70,341 
Additions for tax positions of prior years1,026 1,807 — 
Reduction for tax positions of prior years(269)— — 
Additions for tax positions of current year449 — — 
Settlements— (7,412)— 
Foreign currency adjustments(1,793)(8,791)2,066 
Unrecognized tax benefits at the end of the year$57,424 $58,011 $72,407 
 
As of December 31, 2023, 2022 and 2021, the Company had $55.9 million, $58.0 million and $72.4 million, respectively, of net unrecognized tax benefits, which would affect the Company’s tax rate if recognized. The Company does not anticipate any material changes to its unrecognized tax benefits within the next twelve months.

The Company recognizes interest and penalties accrued related to unrecognized tax benefits as income tax expense. During the years ended December 31, 2023, 2022 and 2021 the Company recognized $5.0 million, $6.4 million and $5.0 million in interest and penalties. The Company had $16.8 million and $11.8 million of interest and penalties accrued at December 31, 2023 and 2022, respectively.

Significant judgment is required in evaluating the Company's uncertain tax positions and determining its provision for income taxes. Although the Company believes that it has appropriately reserved for its uncertain tax positions, no assurance can be given that the final tax outcome of these matters will not be different than expectations. The Company will adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit, the refinement of an estimate, the closing of a statutory audit period or changes in applicable tax law. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences would impact the provision for income taxes in the period in which such determination is made. The provision for income taxes includes the impact of reserve provisions and changes to the reserves that are considered appropriate, as well as related net interest.

The Company recognizes liabilities for anticipated tax audit issues in the U.S. and other domestic and international tax jurisdictions based on its estimate of whether, and the extent to which, the tax positions are more likely than not to be sustained based on the technical merits. The Company believes that it has appropriate support for the income tax positions taken and to be taken on its tax returns and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax laws applied to the facts of each matter.

The Company believes it maintains appropriate reserves to offset any potential income tax liabilities that may arise upon final resolution of matters for open tax years. If such reserve amounts ultimately prove to be unnecessary, the resulting reversal of such reserves could result in tax benefits being recorded in the period the reserves are no longer deemed necessary. If such amounts prove to be less than an ultimate assessment, a future charge to expense would be recorded in the period in which the assessment is determined.