NOTE 7 — Income Taxes

The current and deferred income tax (expense) benefit from continuing operations is as follows:

	Years ended December 31,
	2014			2013			2012
Current:
Federal	$	(2,273,000	)	$	(1,869,000	)	$	(136,000	)
State	(744,000		)	(892,000		)	(866,000		)
	(3,017,000		)	(2,761,000		)	(1,002,000		)
Deferred:
Federal	703,000			773,000			(2,520,000		)
State	178,000			63,000			31,000
	881,000			836,000			(2,489,000		)
Total income tax expense	$	(2,136,000	)	$	(1,925,000	)	$	(3,491,000	)

A reconciliation of the effective income tax rate with the applicable statutory federal income tax rate is as follows:

	Years ended December 31,
	2014		2013		2012
Federal tax at statutory rate	35.0	%	35.0	%	35.0	%
State taxes, net of federal benefit	6.1	%	13.4	%	6.9	%
Valuation allowance	0.9	%	0.1	%	(0.4	)%
Non-deductible stock based compensation	—		1.6	%	1.6	%
Other	(1.6	)%	(1.4	)%	0.2	%
Effective income tax rate	40.4	%	48.7	%	43.3	%

Deferred income tax assets and liabilities are comprised of the following as of December 31:

	2014			2013
Deferred income tax assets:
Accruals not currently deductible for income taxes	$	2,985,000		$	1,846,000
Net operating loss carry-forwards	10,948,000			11,070,000
Total deferred income tax assets	13,933,000			12,916,000
Valuation allowance	(10,404,000		)	(10,360,000		)
Net deferred income tax assets	3,529,000			2,556,000

Deferred income tax liabilities:
Depreciation	(18,033,000		)	(19,070,000		)
Total deferred income tax liabilities	(18,033,000		)	(19,070,000		)
Net deferred income tax liability	$	(14,504,000	)	$	(16,514,000	)

Amounts recognized in the consolidated balance sheets:
Current deferred income tax assets	$	79,000		$	76,000
Noncurrent deferred income tax assets	580,000			336,000
Noncurrent deferred income tax liabilities	(15,163,000		)	(16,926,000		)
	$	(14,504,000	)	$	(16,514,000	)

Deferred income taxes relate to the temporary differences between financial accounting income and taxable income and are primarily attributable to differences between the book and tax basis of property and equipment and net operating loss carry-forwards (expiring through 2029). At December 31, 2014, we have available state net operating loss carryforwards of $218,307,000. Valuation allowances which fully reserve the state net operating loss carryforwards, net of federal tax benefit, increased (decreased) in 2014, 2013 and 2012 by $44,000, ($1,805,000) and ($24,000), respectively.

We recognize interest expense and penalties on uncertain income tax positions as a component of interest expense. No interest expense or penalties were recorded for uncertain income tax matters in 2014, 2013 or 2012. As of December 31, 2014 and 2013, we had no liabilities for uncertain income tax matters.

We file income tax returns with the Internal Revenue Service and the states in which we conduct business. We have identified the U.S. federal and state of Delaware as our major tax jurisdictions. As of December 31, 2014, tax years after 2010 remain open to examination for federal and Delaware income tax purposes.