NOTE 7—Income Taxes

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

	Years ended December 31,
	2016			2015			2014
Current:
Federal	$	(513,000	)	$	(972,000	)	$	(503,000	)
State	(155,000		)	(378,000		)	(182,000		)

	(668,000		)	(1,350,000		)	(685,000		)

Deferred:
Federal	34,000			423,000			623,000
State	2,000			85,000			100,000

	36,000			508,000			723,000

Total income tax (expense) benefit	$	(632,000	)	$	(842,000	)	$	38,000

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

	Years ended December 31,
	2016		2015		2014
Federal tax at statutory rate	34.0	%	34.0	%	(34.0	)%
State taxes, net of federal benefit	6.0	%	6.0	%	3.7	%
Non-deductible stock based compensation	8.4	%	6.3	%	24.8	%
Federal tax credit for payroll tax on employee tips	(4.7	)%	(14.6	)%	—
Other	0.9	%	(0.7	)%	0.4	%

Effective income tax rate	44.6	%	31.0	%	(5.1	)%

The components of deferred income tax assets and liabilities are as follows as of December 31:

	2016			2015
Deferred income tax assets:
Point loyalty program	$	656,000		$	660,000
Accrued expenses	4,077,000			3,901,000
Net operating loss carry-forwards	—			91,000
Federal tax credit for payroll tax on employee tips	96,000			132,000
Other	236,000			297,000

Total deferred income tax assets	5,065,000			5,081,000
Valuation allowance	—			(91,000		)

Net deferred income tax assets	5,065,000			4,990,000


Deferred income tax liabilities:
Depreciation — property and equipment	(3,045,000		)	(3,200,000		)

Total deferred income tax liabilities	(3,045,000		)	(3,200,000		)

Net deferred income tax assets	$	2,020,000		$	1,790,000


Amounts recognized in the consolidated balance sheet:
Current deferred income tax assets	$	—		$	1,308,000
Noncurrent deferred income tax assets	2,020,000			482,000

	$	2,020,000		$	1,790,000