Semiconductor Equipment & Materials Intl

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“Semi is a not-for-profit trade association recognized by the irs and ftb as exempt from federal and state income taxes in the united states. However, certain activities in other countries, such as trade shows, are subject to foreign income taxes on income generated in their respective jurisdictions. Accordingly, foreign income taxes are included in general and administrative expenses for regional offices in the accompanying consolidated statements of activities and changes in net assets. Net income tax expense was as follows for the years ended december 31 (in thousands): 2017 2016 current $230 $400 deferred 30 10 -------------------------- $260 $410 net deferred tax assets included in deferred events, standards and information revenues on the consolidated statements of financial position approximated $110,000 and $70,000 at december 31, 2017 and 2016, respectively. The amounts consist principally of deferred revenues and deferred expenses related to exhibitions, accruals, and depreciation. No valuation allowance was recorded at december 31, 2017 and 2016, as the group concluded that all of the deferred tax assets will be realized in future years. Net deferred assets are recorded as deferred expenses and other current assets on the consolidated statements of financial position and any change is recorded as general and administrative expenses for international offices on the statement of activities and changes in net assets. Additionally, semi generates unrelated business income, primarily from its advertising activities. These activities have historically generated losses and semi has accumulated net operating loss carryforwards ("nols"). As of december 31, 2017 and 2016, semi had nols of approximately $5,450,000 and $5,420,000. There is no limitation on the use of these nols and they will begin to expire in 2022. Semi's ability to utilize the nols or realize any benefits is uncertain, and therefore a full valuation allowance has been applied against them. On december 22, 2017, the tax cuts and jobs act (the "2017 tax act") was enacted. The 2017 tax act includes a number of changes to existing u.s. Tax laws that impact the company, most notably a reduction of the u.s. Corporate income tax rate from 35 percent to 21 percent for tax years beginning after december 31, 2017. The company measures deferred tax assets and liabilities using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid. Accordingly, the companys deferred tax assets and liabilities were re-measured to reflect the reduction in the u.s. Corporate income tax rate from 35 percent to 21 percent. There is no net effect of the tax reform enactment on the financial statements at december 31, 2017. The group's total gross unrecognized tax benefits are classified as non-current liabilities in the consolidated statements of financial position. As of december 31, 2017 and 2016, the total amount of gross unrecognized tax benefits was approximately $788,000 and $837,000, respectively, which results entirely from foreign taxes and is included in other long-term liabilities in the consolidated statement of financial position. The aggregate changes in the balance of gross unrecognized tax benefits, which includes interest and penalties, are as follows (in thousands): balance as of january 1, 2017 $837 decreases related to expiry of statute of limitation (75) increases related to tax positions taken during a prior period 26 ----------------------------------------------------------------------- balance as of december 31, 2017 $788 as of december 31, 2017, the group has analyzed the inventory of tax positions taken with respect to all applicable income tax issues for all open tax years (in each respective jurisdiction) including tax years ended december 31, 2014 through december 31, 2017 for u.s. Federal tax purposes and tax years ended december 31, 2013 through december 31, 2017 for california tax purposes (except”