The components of income (loss) from operations before income taxes are as follows:

The components of the income tax (benefit) provision from operations are as follows:

The income tax (benefit) provision for continuing operations computed using the federal statutory income tax rate differs from our effective tax rate primarily due to the following:

The Tax Reform Act was signed into United States tax law on December 22, 2017.  The Tax Reform Act significantly changed the U.S. corporate income tax regime by, amongst other things, lowering the U.S. corporate tax rate from 35% to 21% effective January 1, 2018, imposing a limitation of the deduction for net operating losses to 80% of annual taxable income and eliminating net operating loss carrybacks, in each case, for losses arising in taxable years beginning after December 31, 2017 (though any such net operating losses may be carried forward indefinitely).  The Tax Reform Act also provided for a one-time tax on the deemed repatriation of accumulative foreign earnings of foreign subsidiaries (the “Transition Tax”), as well as prospective changes beginning in 2018, including additional limitations on executive compensation.  Under GAAP, the effects of changes in income tax rates and laws are recognized in the period in which the new legislation is enacted.

On December 22, 2017, the Securities and Exchange Commission issued guidance under SAB 118, which allows us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date.  Accordingly, we recorded an estimate of $3.9 million of Transition Tax expense, offset completely by tax losses, and $17.1 million due to a remeasurement of our net deferred tax assets offset by valuation allowance, during the year ended January 31, 2018 which reflected provisional amounts for those specific income tax effects of the Tax Reform Act.  

As permitted under SAB 118, we recorded provisional estimates for the impact of the Tax Reform Act during the year ended January 31, 2018, and finalized our accounting analysis based on the guidance, interpretations, and data available as of January 31, 2019 resulting in immaterial changes to our provisional amounts.   

We are subject to additional requirements of the Tax Reform Act during the year ended January 31, 2019.  Those provisions include a tax on global intangible low-taxed income (“GILTI”), a limitation on certain executive compensation, and other immaterial provisions.  We have elected to account for GILTI as a period cost, and therefore included GILTI expense in our effective tax rate calculation.  In the current year GILTI had no tax impact.

The components of deferred income taxes are as follows:

At January 31, 2019, we had federal, state and foreign net operating loss carry forwards of $118.0 million, $185.8 million and $2.1 million respectively, which can be used to offset future tax liabilities and expire at various dates beginning in fiscal 2020. Utilization of these net operating loss carry forwards may be limited pursuant to provisions of the respective local jurisdiction. In addition, at January 31, 2019, we had federal and state research and development credit carry forwards of $3.8 million and $1.8 million respectively, and state investment tax credit carry forwards of $0.2 million. We have foreign tax credit carry forwards of $2.3 million, which are available to reduce future federal regular income taxes. These credits expire at various dates beginning in fiscal 2019, except for $0.2 million in credits that have an unlimited carryforward period.

We review the adequacy of the valuation allowance for deferred tax assets on a quarterly basis. We have evaluated the positive and negative evidence bearing upon the realizability of our deferred tax assets and have established a valuation allowance of $42.0 million for such assets, which are comprised principally of net operating loss carry forwards, research and development credits, deferred revenue, inventory and stock-based compensation. If we generate pre-tax income in the future, some portion or all of the valuation allowance could be reversed and a corresponding increase in net income would be reported in future periods. The valuation allowance increased $3.7 million for the year ended January 31, 2019 and decreased by $19.8 million for the fiscal year ended January 31, 2018.  

As of January 31, 2019, we maintain our assertion that all of our foreign earnings, except those related to our Irish operations, are to be permanently reinvested outside the United States.  

A reconciliation of the total amounts of gross unrecognized tax benefits, is as follows:

As of January 31, 2019, we have no unrecognized tax benefits, that if recognized, would reduce income tax expense in fiscal 2020. We recognized interest and penalties related to unrecognized tax benefits in income tax (benefit) provision on our consolidated statements of operations and comprehensive income (loss). As of January 31, 2019 and 2018, total gross interest accrued was $0.1 million and $0.1 million, respectively.