14.	Income Taxes

The components of the provision for income taxes for each of the three years were as follows:

	2019			2018			2017
Current:
Federal	$	38,831		$	40,761		$	83,743
State		8,310			6,099			7,567
Deferred:
Federal		(1,427	)		(16,779	)		4,696
State		(2,759	)		722			982
Total provision for income taxes	$	42,955		$	30,803		$	96,988

A reconciliation of the Company’s provision for income taxes and income taxes based on the statutory U.S. federal rate of 21.0%, 26.9% and 35.0% in 2019, 2018 and 2017, respectively, was as follows:

	2019			2018			2017
Provision computed at federal statutory income tax rate	$	55,935		$	74,859		$	104,611
State and local income taxes, net of federal benefit		4,248			5,066			5,856
Revaluation of deferred taxes due to a reduction in the federal tax rate at the enactment date of the Tax Act		—			(26,772	)		—
Revaluation of deferred taxes due to the impact of the change in rate on 2018 temporary items		—			(3,710	)		—
Employer tax credits for FICA taxes paid on employee tip income		(15,107	)		(13,707	)		(11,543	)
Other employer tax credits		(3,537	)		(4,476	)		(2,814	)
Other-net		1,416			(457	)		878
Total provision for income taxes	$	42,955		$	30,803		$	96,988

The increase in the Company’s provision for income taxes from 2018 to 2019 reflected the significant impact of the Tax Act. The Tax Act made broad and complex changes to the U.S. tax code, including, but not limited to, reducing the U.S. federal corporate tax rate from 35% to 21%. This rate reduction lowered deferred tax liabilities, the tax benefit of which was recognized in 2018.

Similarly, the decrease in the Company’s provision for income taxes from 2017 to 2018 reflected the significant impact of the Tax Act. In accordance with Section 15 of the Internal Revenue Code, the Company used a blended rate of 26.9% for its fiscal 2018 tax year, by applying a prorated percentage of the number of days prior to and subsequent to the January 1, 2018 effective date of the Tax Act.

Significant components of the Company’s net deferred tax liability consisted of the following at:

	August 2, 2019		August 3, 2018
Deferred tax assets:
Compensation and employee benefits	$	6,496	$	6,342
Deferred rent		13,424		12,667
Accrued liabilities		21,379		8,546
Insurance reserves		7,571		7,291
Inventory		2,873		3,106
Other		536		—
Deferred tax assets	$	52,279	$	37,952

Deferred tax liabilities:
Property and equipment	$	85,379	$	75,433
Inventory		7,363		7,448
Other		3,656		7,232
Deferred tax liabilities		96,398		90,113
Net deferred tax liability	$	44,119	$	52,161

The Company believes that adequate amounts of tax, interest and penalties have been provided for potential tax uncertainties; these amounts are included in other long-term liabilities in the Consolidated Balance Sheets. As of August 2, 2019 and August 3, 2018, the Company’s gross liability for uncertain tax positions, exclusive of interest and penalties, was $18,006 and $18,634, respectively.

Summarized below is a tabular reconciliation of the beginning and ending balance of the Company’s total gross liability for uncertain tax positions exclusive of interest and penalties:

	August 2, 2019			August 3, 2018			July 28, 2017
Balance at beginning of year	$	18,634		$	20,731		$	21,899
Tax positions related to the current year: Additions		2,742			3,029			4,003
Reductions		—			—			—
Tax positions related to the prior year: Additions		203			610			582
Reductions		(348	)		(575	)		(2,966	)
Settlements		(1,784	)		(3,878	)		(1,027	)
Expiration of statute of limitations		(1,441	)		(1,283	)		(1,760	)
Balance at end of year	$	18,006		$	18,634		$	20,731

If the Company were to prevail on all uncertain tax positions, the reversal of this accrual would be a tax benefit to the Company and impact the effective tax rate. The following table highlights the amount of uncertain tax positions, exclusive of interest and penalties, which, if recognized, would affect the effective tax rate for each of the three years:

		2019				2018				2017
Uncertain tax positions		$	14,225			$	14,721			$	13,475

The Company had $6,297, $5,681, and $6,128 in interest and penalties accrued as of August 2, 2019, August 3, 2018, and July 28, 2017, respectively.

The Company recognized accrued interest and penalties related to unrecognized tax benefits of $616, $(447) and $631 in its provision for income taxes on August 2, 2019, August 3, 2018 and July 28, 2017, respectively. The increase from 2018 to 2019 was primarily attributable to additional accruals in excess of settlements and expirations. The decrease from 2017 to 2018 was primarily attributable to audit settlements in 2018.

In many cases, the Company’s uncertain tax positions are related to tax years that remain subject to examination by the relevant taxing authorities. Based on the outcome of these examinations or as a result of the expiration of the statutes of limitations for specific taxing jurisdictions, it is reasonably possible that the related uncertain tax positions taken regarding previously filed tax returns could decrease from those recorded as liabilities for uncertain tax positions in the Company’s financial statements at August 2, 2019 by approximately $3,000 to $4,000 within the next twelve months. At August 2, 2019, the Company was subject to income tax examinations for its U.S. federal income taxes after 2015 and for state and local income taxes generally after 2015.