PRSS 2017 Annual Report

63 Cost of net revenue and operating expense includes stock-based compensation as follows (in thousands): Year Ended December 31, 2017 2016 Cost of net revenue $ 15 $ 49 Sales and marketing 85 269 Technology and development 31 81 General and administrative 1,638 1,208 Total stock-based compensation expense $ 1,769 $ 1,607 Capitalizable stock-based compensation relating to inventory or deferred cost of revenues was not significant for any period presented. We capitalized $0 and $24 thousand of stock-based compensation relating to software developed for internal use, including website development costs during the years ended December 31, 2017 and 2016, respectively. At December 31, 2017, we had $3.0 million of total unrecognized compensation expense related to stock option and restricted stock plans that will be recognized over a weighted-average period of approximately two years. 7. Income Taxes The components of the provision (benefit) for income taxes are as follows (in thousands): Year Ended December 31, 2017 2016 Current (benefit) tax expense: Federal $ (92) $ (67) State 4 15 Total current (88) (52) Deferred tax (benefit) expense: Federal 92 (321) State — (17) Total deferred 92 (338) Total provision (benefit) for income taxes $ 4 $ (390) The (provision) benefit for income taxes differs from the federal statutory income tax rate as follows: Year Ended December 31, 2017 2016 Federal statutory tax rate 34.0% 34.0% State taxes 0.9 0.3 Federal tax reform - deferred rate change (52.7) — Goodwill impairment — (25.1) Change in valuation allowance 17.8 (7.5) Stock-based compensation (0.1) (0.1) Meals, entertainment and other 0.1 (0.1) Total —% 1.5% Deferred tax assets (liabilities) consist of the following (in thousands):