NOTE 6 — Income Taxes

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


	Years ended December 31,
	2018		2017		2016
Current:
Federal	$	(2,461,000)	$	(1,835,000)	$	(2,456,000)
State		(683,000)		(562,000)		(794,000)
		(3,144,000)		(2,397,000)		(3,250,000)
Deferred:
Federal		929,000		4,353,000		520,000
State		37,000		(67,000)		141,000
		966,000		4,286,000		661,000
Total income tax (expense) benefit	$	(2,178,000)	$	1,889,000	$	(2,589,000)

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


	Years ended December 31,
	2018		2017		2016
Federal tax at statutory rate	21.0	%	35.0	%	35.0	%
State taxes, net of federal benefit	19.8	%	8.8	%	36.0	%
Valuation allowance	(14.2)	%	(2.5)	%	(29.2)	%
Tax Cuts and Jobs Act	—		(69.3)	%	—
Other	(2.6)	%	(0.9)	%	(1.3)	%
Effective income tax rate	24.0	%	(28.9)	%	40.5	%

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


	2018		2017
Deferred income tax assets:
Accruals not currently deductible for income taxes	$	1,524,000	$	1,906,000
Net operating loss carry-forwards		7,602,000		8,928,000
Total deferred income tax assets		9,126,000		10,834,000
Valuation allowance		(7,005,000)		(8,291,000)
Net deferred income tax assets		2,121,000		2,543,000

Deferred income tax liabilities:
Depreciation		(10,492,000)		(11,216,000)
Total deferred income tax liabilities		(10,492,000)		(11,216,000)
Net deferred income tax liability	$	(8,371,000)	$	(8,673,000)

Amounts recognized in the consolidated balance sheets:
Noncurrent deferred income tax liabilities	$	(8,371,000)	$	(8,673,000)

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 2032). At December 31, 2018, we have available state net operating loss carryforwards of $137,913,000. Valuation allowances which fully reserve the state net operating loss carryforwards, net of federal tax benefit, decreased in 2018, 2017 and 2016 by $1,286,000, $163,000 and $1,872,000, respectively.

The passage of the Tax Cuts and Jobs Act in December of 2017 lowered our federal income tax rate to 21% beginning in 2018 requiring us to revalue our net deferred federal tax liabilities at December 31, 2017. This resulted in a $4,531,000 decrease in our net deferred income tax liabilities, with a corresponding deferred income tax benefit.

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 2018, 2017 or 2016. As of December 31, 2018 and 2017, 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, 2018, tax years after 2014 remain open to examination for federal and Delaware income tax purposes.