|6 Months Ended|
Jun. 30, 2019
|Income Tax Disclosure [Abstract]|
The income tax expense rate for the three months ended June 30, 2019 and 2018 was 1.8% and (6.5)%, respectively, and for the six months ended June 30, 2019 and 2018 was 2.7% and (8.4)%, respectively. The differences between the actual consolidated effective income tax rate and the U.S. federal statutory rate were primarily attributable to an increase in valuation allowance on deferred tax assets, the allocation of losses on noncontrolling interests, redeemable noncontrolling interests, and stock compensation deductions.
The Company sells solar energy systems to investment Funds. As the investment Funds are consolidated by the Company, the gain on the sale of the assets has been eliminated in the consolidated financial statements, however gains on sale are recognized for tax purposes.
Tax Cuts and Jobs Act
On December 22, 2017, the U.S, government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). While the Company has fully accounted for the impact of the Tax Act, it will continue to monitor additional clarification and guidance from the IRS, including guidance related to Section 451(c) income recognition that could lead to the Company utilizing a portion of its net operating losses.
Uncertain Tax Positions
As of June 30, 2019 and December 31, 2018, the Company had $0.6 million of unrecognized tax benefits related to an acquisition in 2015. During the three and six months ended June 30, 2019, the Company recorded an income tax benefit of $0.6 million from the release of unrecognized tax benefits and $0.2 million from the release of interest and penalties due to the expiration of federal and California statute of limitations. As of June 30, 2019, the Company has no other uncertain tax positions.
Net Operating Loss Carryforwards
As a result of the Company’s net operating loss carryforwards as of June 30, 2019 and December 31, 2018, the Company does not expect to pay income tax, including in connection with its income tax provision for the six months ended June 30, 2019. As of December 31, 2018, the Company had net operating loss carryforwards for federal, California, and other state income tax purposes of approximately $1.1 billion, $572.2 million, $535.8 million, respectively. Federal and certain state net operating loss carryforwards generated in tax years beginning after December 31, 2017 total $331.0 million and $444.0 million, respectively, and have indefinite carryover periods and do not expire. If not utilized, the remaining federal net operating loss will begin to expire in 2028, and the state operating losses will begin to expire in 2024.
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef