A provision for income taxes of $110 million, $58 million and $32 million has been recognized for the years ended December 31, 2019, 2018 and 2017, respectively, related primarily to our subsidiaries located outside of the U.S. Our loss before provision for income taxes for the years ended December 31, 2019, 2018 and 2017 was as follows (in millions):

	Year Ended December 31,
	2019			2018		2017
Domestic	$	287		$	412	$	993
Noncontrolling interest and redeemable noncontrolling interest		(87	)		87		279
Foreign		465			506		937
Loss before income taxes	$	665		$	1,005	$	2,209

The components of the provision for income taxes for the years ended December 31, 2019, 2018 and 2017 consisted of the following (in millions):

	Year Ended December 31,
	2019			2018			2017
Current:
Federal	$	—		$	(1	)	$	(10	)
State		5			3			2
Foreign		86			24			43
Total current		91			26			35
Deferred:
Federal		(4	)		—			—
State		—			—			—
Foreign		23			32			(3	)
Total deferred		19			32			(3	)
Total provision for income taxes	$	110		$	58		$	32

On December 22, 2017, the 2017 Tax Cuts and Jobs Act (“Tax Act”) was enacted into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a federal corporate tax rate decrease from 35% to 21% for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system and a one-time transition tax on the mandatory deemed repatriation of foreign earnings. We were required to recognize the effect of the tax law changes in the period of enactment, such as re-measuring our U.S. deferred tax assets and liabilities as well as reassessing the net realizability of our deferred tax assets and liabilities. The Tax Act did not give rise to any material impact on the consolidated balance sheets and consolidated statements of operations due to our historical worldwide loss position and the full valuation allowance on our net U.S. deferred tax assets.

Deferred tax assets (liabilities) as of December 31, 2019 and 2018 consisted of the following (in millions):

	December 31,			December 31,
	2019			2018
Deferred tax assets:
Net operating loss carry-forwards	$	1,846		$	1,760
Research and development credits		486			377
Other tax credits		126			128
Deferred revenue		301			156
Inventory and warranty reserves		243			165
Stock-based compensation		102			102
Operating lease right-of-use liabilities		290			—
Accruals and others		16			28
Total deferred tax assets		3,410			2,716
Valuation allowance		(1,956	)		(1,806	)
Deferred tax assets, net of valuation allowance		1,454			910
Deferred tax liabilities:
Depreciation and amortization		(1,185	)		(861	)
Investment in certain financing funds		(17	)		(33	)
Operating lease right-of-use assets		(263	)		—
Other		(24	)		(24	)
Total deferred tax liabilities		(1,489	)		(918	)
Deferred tax liabilities, net of valuation allowance and deferred tax assets	$	(35	)	$	(8	)

As of December 31, 2019, we recorded a valuation allowance of $1.96 billion for the portion of the deferred tax asset that we do not expect to be realized. The valuation allowance on our net deferred taxes increased by $150 million, decreased by $38 million, and increased by $821 million during the years ended December 31, 2019, 2018 and 2017, respectively. The changes in valuation allowance are primarily due to additional U.S. deferred tax assets and liabilities incurred in the respective year. We have net $151 million of deferred tax assets in foreign jurisdictions, which management believes are more-likely-than-not to be fully realized given the expectation of future earnings in these jurisdictions. We continue to monitor the realizability of the U.S. deferred tax assets taking into account multiple factors, including the results of operations and magnitude of excess tax deductions for stock-based compensation. We intend to continue maintaining a full valuation allowance on our U.S. deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. Release of all, or a portion, of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period the release is recorded.

The reconciliation of taxes at the federal statutory rate to our provision for income taxes for the years ended December 31, 2019, 2018 and 2017 was as follows (in millions):

	Year Ended December 31,
	2019			2018			2017
Tax at statutory federal rate	$	(139	)	$	(211	)	$	(773	)
State tax, net of federal benefit		5			3			2
Nondeductible expenses		94			65			30
Excess tax benefits related to stock based compensation (1)		(7	)		(44	)		(1,013	)
Foreign income rate differential		189			161			365
U.S. tax credits		(107	)		(80	)		(110	)
Noncontrolling interests and redeemable noncontrolling interests adjustment		(29	)		32			66
Effect of U.S. tax law change		—			—			723
Bargain in purchase gain		—			—			20
Convertible debt		(4	)		—			—
Unrecognized tax benefits		17			1			3
Change in valuation allowance		91			131			719
Provision for income taxes	$	110		$	58		$	32

As of December 31, 2019, we had $7.51 billion of federal and $6.16 billion of state net operating loss carry-forwards available to offset future taxable income, which will not begin to significantly expire until 2024 for federal and 2028 for state purposes. A portion of these losses were generated by SolarCity prior to our acquisition in 2016 and, therefore, are subject to change of control provisions, which limit the amount of acquired tax attributes that can be utilized in a given tax year. We do not expect these change of control limitations to significantly impact our ability to utilize these attributes.

As of December 31, 2019, we had research and development tax credits of $320 million and $284 million for federal and state income tax purposes, respectively. If not utilized, the federal research and development tax credits will expire in various amounts beginning in 2024. However, the state research and development tax credits can be carried forward indefinitely. In addition, we have other general business tax credits of $125 million for federal income tax purposes, which will not begin to significantly expire until 2033.

No deferred tax liabilities for foreign withholding taxes have been recorded relating to the earnings of our foreign subsidiaries since all such earnings are intended to be indefinitely reinvested. The amount of the unrecognized deferred tax liability associated with these earnings is immaterial.

Federal and state laws can impose substantial restrictions on the utilization of net operating loss and tax credit carry-forwards in the event of an “ownership change,” as defined in Section 382 of the Internal Revenue Code. We have determined that no significant limitation would be placed on the utilization of our net operating loss and tax credit carry-forwards due to prior ownership changes.

The changes to our gross unrecognized tax benefits were as follows (in millions):


December 31, 2016	$	204
Decreases in balances related to prior year tax positions		(31	)
Increases in balances related to current year tax positions		84
Changes in balances related to effect of U.S. tax law change		(58	)
December 31, 2017		199
Decreases in balances related to prior year tax positions		(6	)
Increases in balances related to current year tax positions		60
December 31, 2018		253
Decreases in balances related to prior year tax positions		(39	)
Increases in balances related to current year tax positions		59
December 31, 2019	$	273

As of December 31, 2019, accrued interest and penalties related to unrecognized tax benefits are classified as income tax expense and were immaterial. Unrecognized tax benefits of $247 million, if recognized, would not affect our effective tax rate since the tax benefits would increase a deferred tax asset that is currently fully offset by a full valuation allowance.

We file income tax returns in the U.S., California and various state and foreign jurisdictions. We are currently under examination by the IRS for the years 2015 and 2016. Additional tax years within the period 2004 to 2018 remain subject to examination for federal income tax purposes, and tax years 2004 to 2018 remain subject to examination for California income tax purposes. All net operating losses and tax credits generated to date are subject to adjustment for U.S. federal and California income tax purposes. Tax years 2008 to 2018 remain subject to examination in other U.S. state and foreign jurisdictions.

The potential outcome of the current examination could result in a change to unrecognized tax benefits within the next twelve months. However, we cannot reasonably estimate possible adjustments at this time.

The U.S. Tax Court issued a decision in Altera Corp v. Commissioner related to the treatment of stock-based compensation expense in a cost-sharing arrangement. On June 7, 2019, the Court reversed the Tax Court decision and upheld the validity of Treas. Reg. Section 1.482-7A(d)(2), requiring stock-based compensation costs be included in the costs shared under a cost sharing agreement. Given that the current active decision can still be appealed because Altera has the option to petition up to the Supreme Court, Tesla’s position is to continue to include stock-based compensation in cost sharing allocation agreement. If and when the current tax court’s decision is overturned, we will treat the amount previously shared as a pre-payment to future cost sharing agreement costs. Because we have a full valuation allowance in the U.S., any potential tax benefits would increase our U.S. deferred tax asset and would not have a material impact to our financials.