Marcus & Millichap, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

Income Taxes

6 Months Ended

Jun. 30, 2017

Income Tax Disclosure [Abstract]

Income Taxes

10.

Income Taxes

The Company’s effective tax rate for the three and six months ended June 30, 2017 was 39.2% and 38.9%, compared to 39.7% and 39.8% for the three and six months ended June 30, 2016. The Company provides for the effects of income taxes in interim financial statements based on the Company’s estimate of its annual effective tax rate for the full year, which is based on forecasted income by jurisdiction where the Company operates, adjusted for the tax effects of items that relate discretely to the period, if any.

The provision for income taxes differs from the amount computed by applying the statutory federal corporate income tax rate of 35% to income before provision for income taxes and consisted of the following (in thousands):


	Three Months Ended June 30,
	2017						2016
	Amount			Rate			Amount		Rate
Income tax expense at the federal statutory rate of 35%	$	8,967			35.0	%	$	10,173		35.0	%
State income tax expense, net of federal benefit		973			3.8	%		1,153		4.0	%
Foreign rate differential		25			0.1	%		48		0.2	%
Change in valuation allowance		62			0.2	%		120		0.4	%
Other		25			0.1	%		48		0.1	%

	$	10,052			39.2	%	$	11,542		39.7	%


	Six Months Ended June 30,
	2017						2016
	Amount			Rate			Amount		Rate
Income tax expense at the federal statutory rate of 35%	$	15,793			35.0	%	$	18,817		35.0	%
State income tax expense, net of federal benefit		1,741			3.9	%		2,139		4.0	%
Foreign rate differential		47			0.1	%		107		0.2	%
Windfall tax benefits, net related to stock-based compensation		(156	)		(0.4	)%		—		—
Change in valuation allowance		116			0.3	%		266		0.5	%
Other		13			—			95		0.1	%

	$	17,554			38.9	%	$	21,424		39.8	%