10.	INCOME TAXES

Income tax expense consists of the following:

	Year Ended December 31,
	2016			2015			2014
Current:
Federal	$	17,562		$	14,395		$	10,039
State		539			31			0
		18,101			14,426			10,039
Deferred:
Federal		509			(662	)		(425	)
State		(61	)		(66	)		177
		448			(728	)		(248	)
	$	18,549		$	13,698		$	9,791

A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:

	Year Ended December 31,
	2016			2015			2014
Statutory federal income tax rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal benefit		0.6			0			0.5
Executive compensation limitation		0.1			0			0.9
Food donations		(1.1	)		(1.2	)		(0.4	)
Fixed assets		0			0.5			(1.4	)
Changes in reserves		(0.1	)		(0.1	)		0.1
Tax credits		(0.2	)		(0.5	)		(0.5	)
Other		0			0.8			(0.6	)
Expired charitable contribution carryover		0			1.9			0
Valuation allowance		0			(2.0	)		0
		34.3	%		34.4	%		33.6	%

The change in the effective tax rate from 2014 to 2015 was due to the write-off of certain deferred tax assets and liabilities offset by increased levels of food donations.

The significant items comprising the Company’s deferred income tax assets and liabilities are as follows:

	December 31,
	2016			2015
Deferred tax asset:
Reserves and accrual	$	1,470		$	1,071
Goodwill/Intangible assets		721			801
Net operating loss carryforward		1,653			1,591
Stock-based compensation		2,441			1,839
Charitable contribution carryforward		1,432			1,895
Other		1,014			1,068
		8,731			8,265
Deferred tax liability:
Property and equipment		(1,791	)		(966	)
Net deferred tax asset	$	6,940		$	7,299

At December 31, 2016 and 2015, the Company had net operating loss carryforwards of approximately $28,038 and $28,696, respectively, for state tax purposes. For state tax purposes, there is a limitation on the amount of net operating loss carryforwards that can be utilized in a given year to offset state taxable income. Net operating losses will begin to expire in 2025.

At December 31, 2014, the Company had a valuation allowance of $800 recorded against its deferred tax asset generated for charitable contributions. The Company recorded the valuation allowance to reduce the deferred tax asset to an amount it expects is more likely than not to be realized due to the short carryforward period for this temporary difference. In 2015, the Company reduced the valuation allowance to zero due to the expiration of certain charitable contribution carryover. At December 31, 2016 and 2015, there was no valuation allowance. Based on the projected level of future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the remaining net deferred tax assets. An analysis of the activity of the valuation allowance is as follows:

	Year Ended December 31,
	2015			2014
Balance at beginning of year	$	800		$	800
Additions charged to expense		0			0
Deductions		(800	)		0
Balance at end of year	$	0		$	800

The total amount of gross unrecognized tax benefits as of December 31, 2016, 2015 and 2014 was $168, $272 and $332, respectively, which is included as a reduction deferred income taxes in the accompanying consolidated balance sheets. The total amount of unrecognized tax benefits that, if recognized, would affect the effective income tax rate is approximately $109, $177 and $216 as of December 31, 2016, 2015 and 2014, respectively. The Company records accrued interest and penalties related to unrecognized tax benefits as part of interest expense, net. During 2014, the Company recognized interest income of $28 from interest and penalties. No interest expense, net was recognized during 2016 and 2015. The Company’s federal income tax returns for 2013 through 2015 are open and are subject to examination by the Internal Revenue Service. State tax jurisdictions that remain open to examination range from 2013 through 2015. The Company does not believe that that there will be any material changes to unrecognized tax positions over the next 12 months.

A reconciliation of the beginning and ending amounts of the total unrecognized tax benefit is as follows:

	Year Ended December 31,
	2016			2015			2014
Balance at beginning of year	$	272		$	332		$	311
Increase related to current year tax positions		20			19			15
Increase related to prior year tax positions		0			72			138
Decrease due to lapse of statute of limitations		(124	)		(151	)		(132	)
Balance at end of year	$	168		$	272		$	332