Income taxes |
6 Months Ended |
|---|---|
Jun. 30, 2016 | |
| Income Tax Disclosure [Abstract] | |
| Income taxes |
Income taxes:
In June 2015, the Company made the decision to release the valuation allowance amounting to $7.7 million against its deferred tax assets net of deferred tax liabilities. Recent profitable quarters and projected future pretax income are sources of positive evidence that led the Company to conclude that it is more likely than not that it will realize its net deferred tax assets.
We estimate our annual effective income tax rate at the end of each quarterly period. This estimate takes into account the mix of expected income (loss) before income taxes by tax jurisdiction and enacted changes in tax laws. Our quarterly tax provision and quarterly estimate of the annual effective tax rate is subject to significant volatility due to several factors including, but not limited to, having to forecast income (loss) before income taxes by jurisdictions for the full year prior to the completion of the full year, changes in non-deductible expenses, jurisdictional mix of our income, non-recurring and impairment charges, as well as the actual amount of income (loss) before income taxes. For example, the impact of non-deductible expenses on our effective tax rate is greater when income (loss) before income taxes is lower. To the extent there are fluctuations in any of these variables during any given period, the provision for income taxes will vary accordingly.
The Company recognized income tax expense of $545,613 for the three months ended June 30, 2016, compared to income tax benefit of $5.9 million for the three months ended June 30, 2015. The Company’s effective tax rate was approximately (60.8)% for the three months ended June 30, 2016, compared to (225.7)% for the three months ended June 30, 2015.
The change in the effective tax rate for the three months ended June 30, 2016, compared to the same period in 2015, was due to the actual amount of income before income taxes being low in the three months ended June 30, 2016, changes in the jurisdictional mix of where income was earned or loss was generated and the release of the valuation allowance on the deferred taxes in 2015.
The Company recognized income tax expense of $479,662 for the six months ended June 30, 2016, compared to income tax benefit of $6,541,931 for the six months ended June 30, 2015. The Company’s effective tax rate, exclusive of the discrete tax expense or benefit, was approximately (6.6)% for the six months ended June 30, 2016, compared to (43.8)% for the six months ended June 30, 2015.
The change in the effective tax rate for the six months ended June 30, 2016, compared to the same period in 2015, was due to the actual amount of income before income taxes being low in the six months ended June 30, 2016, the changes in the jurisdictional mix of where income was earned or loss was generated and the release of the valuation allowance on the deferred taxes in 2015.
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