8. INCOME TAXES

The provision for income taxes is comprised of the following:



	For the Fiscal Years Ended
	August 30,		August 31,		September 1,
	2014		2013		2012
Current:
Federal	$	115,186	$	119,470	$	128,640
State and local		16,528		18,629		18,421
		131,714		138,099		147,061
Deferred:
Federal		10,369		7,403		4,797
State and local		1,375		(68)		1,253
		11,744		7,335		6,050
Total	$	143,458	$	145,434	$	153,111

Significant components of deferred tax assets and liabilities are as follows:



	August 30,		August 31,
	2014		2013
Deferred tax liabilities:
Depreciation	$	(46,722)	$	(46,339)
Deferred catalog costs		(1,937)		(1,730)
Goodwill		(59,387)		(44,751)
		(108,046)		(92,820)
Deferred tax assets:
Accounts receivable		2,933		2,254
Inventory		7,504		7,345
Deferred compensation		1,799		1,509
Stock based compensation		11,582		10,888
Intangible amortization		10,950		9,983
Other		6,485		5,792
		41,253		37,771
Net Deferred Tax Liabilities	$	(66,793)	$	(55,049)

Reconciliation of the statutory Federal income tax rate to the Company’s effective tax rate is as follows:



	For the Fiscal Years Ended
	August 30,		August 31,		September 1,
	2014		2013		2012
U.S. Federal statutory rate	35.0	%	35.0	%	35.0	%
State income taxes, net of Federal benefit	3.1		3.0		2.7
Other, net	(0.3)		(0.1)		(0.5)
Effective income tax rate	37.8	%	37.9	%	37.2	%

The aggregate changes in the balance of gross unrecognized tax benefits during fiscal 2014 and 2013 were as follows:



	August 30,		August 31,
	2014		2013
Beginning Balance	$	8,192	$	7,811
Additions for tax positions relating to current year		2,628		2,516
Reductions for tax positions relating to prior years		(60)		(936)
Settlements		—		(120)
Lapse of statute of limitations		(1,410)		(1,079)
Ending Balance	$	9,350	$	8,192

Included in the balance of unrecognized tax benefits at August 30, 2014 is $1,071 related to tax positions for which it is reasonably possible that the total amounts could significantly change during the next twelve months. This amount represents a decrease in unrecognized tax benefits comprised primarily of items related to expiring statutes of limitations in state jurisdictions.

The Company recognizes interest expense and penalties in the provision for income taxes. The fiscal years 2014, 2013 and 2012 provisions include interest and penalties of $0, $92 and $79, respectively. The Company has accrued $166 and $159 for interest and penalties as of August 30, 2014 and August 31, 2013, respectively.

With limited exceptions, the Company is no longer subject to Federal and state income tax examinations through fiscal 2010.