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

9 Months Ended

Sep. 30, 2017

Income Tax Disclosure [Abstract]

Income Taxes

10.

Income Taxes

The Company’s effective tax rate for the three and nine months ended September 30, 2017 was 39.3% and 39.0%, compared to 40.0% and 39.9% for the three and nine months ended September 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 September 30,
	2017					2016
	Amount		Rate			Amount		Rate
Income tax expense at the federal statutory rate of 35%	$	8,920		35.0	%	$	8,835		35.0	%
State income tax expense, net of federal benefit		993		3.9	%		993		3.9	%
Foreign rate differential		16		0.1	%		55		0.2	%
Windfall tax benefits, net related to stock-based compensation		32		0.1	%		—		—
Change in valuation allowance		38		0.2	%		138		0.5	%
Other		11		—			79		0.4	%

	$	10,010		39.3	%	$	10,100		40.0	%


	Nine Months Ended September 30,
	2017						2016
	Amount			Rate			Amount		Rate
Income tax expense at the federal statutory rate of 35%	$	24,713			35.0	%	$	27,652		35.0	%
State income tax expense, net of federal benefit		2,734			3.9	%		3,132		4.0	%
Foreign rate differential		63			0.1	%		162		0.2	%
Windfall tax benefits, net related to stock-based compensation		(124	)		(0.2	)%		—		—
Change in valuation allowance		154			0.2	%		404		0.5	%
Other		24			—			174		0.2	%

	$	27,564			39.0	%	$	31,524		39.9	%