Income Taxes

The components of income tax expense for the years ended December 31, 2013, 2014 and 2015 were as follows (in thousands):



	2013		2014			2015

Current income tax expense:
Federal	$	20,533	$	19,404		$	17,910
State	3,094		3,252			2,322
	23,627		22,656			20,232
Deferred tax expense:
Federal	1,858		2,623			(241		)
State	160		(129		)	81
	2,018		2,494			(160		)
Income Tax Expense	$	25,645	$	25,150		$	20,072

The tax effects of principal temporary differences are as follows (in thousands):



	2014			2015

Deferred tax assets:
Property and equipment	$	9,215		$	13,629
Stock option compensation expense	1,556			1,336
Allowance for doubtful accounts	3,846			4,988
Accrued vacation and severance	549			576
Restricted stock	1,818			1,830
Investment	100			19
	17,084			22,378
Deferred tax liabilities:
Income tax deductible capitalized software development costs	(24,750		)	(29,592		)
Prepaid expenses	(1,724		)	(2,016		)
	(26,474		)	(31,608		)
Deferred tax liabilities, net	$	(9,390	)	$	(9,230	)

Income tax expense differs from the amount of tax determined by applying the United States Federal income tax rates to pretax income and loss due to permanent tax differences, and the application of state apportionment laws, as follows (in thousands):



	2013					2014					2015
	Amount			%		Amount			%		Amount			%

Tax expense at statutory rate	$	23,688		35.00	%	$	23,110		35.00	%	$	18,370		35.00	%
State taxes, net	2,069			3.06	%	1,985			3.01	%	1,590			3.03	%
Permanent differences	(275		)	(0.41	)%	228			0.35	%	278			0.53	%
Other	163			0.24	%	(173		)	(0.27	)%	(166		)	(0.32	)%
	$	25,645		37.89	%	$	25,150		38.09	%	$	20,072		38.24	%

Permanent differences in the table above are mainly attributable to minority investment losses, nondeductible meals and entertainment expenses, and non-deductible employer contributions to the American Public Education, Inc. Employee Stock Purchase Plan, or ESPP.

The Company is subject to U.S. federal income taxes as well as income tax of multiple state jurisdictions. For federal and state tax purposes, tax years 2012-2015 remain open to examination.