In response to the global pandemic related to COVID-19, President Donald Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) on March 27, 2020. The CARES Act provides numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of net operating losses, temporary changes to the prior and future limitations on interest deductions, technical corrections from prior tax legislation for tax depreciation of certain qualified improvement property, temporary suspension of certain payment requirements for the employer portion of social security taxes, and the creation of certain refundable employee retention credits. There was not a material impact on our income tax expense for the twelve months ended September 30, 2020, related to the CARES Act. We will continue to monitor legislative developments related to COVID-19 and will record the associated income tax impacts in the periods that guidance is finalized or when we are able to reasonably estimate an impact.

On December 22, 2017, the U.S. enacted comprehensive amendments to the Internal Revenue Code of 1986 (“U.S. Tax Reform”). Among other things, U.S. Tax Reform (a) reduced the federal statutory tax rate for corporate taxpayers, (b) provided for a deemed repatriation of undistributed foreign earnings by U.S. taxpayers and made other fundamental changes on how foreign earnings will be taxed by the U.S. and (c) otherwise modified corporate tax rules in significant ways.

The U.S. Treasury Department has issued final regulations covering the one-time transition tax on unrepatriated foreign earnings, which was enacted as part of U.S Tax Reform. Certain guidance included in these final regulations is inconsistent with our interpretation of the enacted tax law that led to the recognition of a $2.5 million benefit in the first quarter of fiscal year 2018. Notwithstanding this inconsistency, we remain confident in our interpretation of the Internal Revenue Code and intend to defend this position through litigation, if necessary. However, if we are ultimately unsuccessful in defending our position, we may be required to reverse the benefit.

Beginning with our first quarter of fiscal year 2019, we are subject to taxation on global intangible low-taxed income (“GILTI”) earned by certain foreign subsidiaries. We have made the policy election to record this tax as a period cost at the time it is incurred. The impact from GILTI was immaterial for fiscal years 2020 and 2019. For the fiscal year ended September 30, 2020, the provision for income taxes also includes a benefit due to a reduction of prior year tax related to GILTI. The benefit is a result of favorable final Regulations being issued by the Department of Treasury in July 2020, which can be applied retroactively.

The provision for income taxes for the fiscal years 2020, 2019 and 2018 consists of the following (in thousands):

	Fiscal Year Ended September 30,
	2020		2019			2018
Current:
Federal	$	22,282	$	59,855		$	68,608
Foreign		6,120		10,132			11,039
State		4,730		15,339			11,344
Total current portion		33,132		85,326			90,991
Deferred:
Federal		10,177		4,905			(26,001	)
Foreign		1,321		(1,498	)		1,868
State		2,092		1,808			3,522
Total deferred portion		13,590		5,215			(20,611	)
Total provision for income taxes	$	46,722	$	90,541		$	70,380

The difference between the U.S. statutory federal income tax rate and the effective income tax rate is summarized below:

	Fiscal Year Ended September 30,
	2020				2019				2018
U.S. federal statutory income tax rate		21.0		%		21.0		%		24.5		%
State income taxes, net of federal tax benefit		3.4				3.4				3.2
Effect of foreign operations		(0.4	)			0.2				—
Foreign valuation allowances		4.6				(0.2	)			0.6
Tax law change - GILTI		(1.0	)			—				—
Deferred tax revaluation, including adoption of income tax method changes		—				—				(11.5	)
Deemed repatriation tax		0.2				(0.3	)			3.6
Share-based payment awards		1.2				0.6				0.5
Other, net		0.2				0.3				0.5
Effective tax rate		29.2		%		25.0		%		21.4		%

The tax effects of temporary differences that give rise to our deferred tax assets and liabilities are as follows (in thousands):

	September 30,
	2020			2019
Deferred tax assets attributable to:
Foreign loss carryforwards	$	35,091		$	27,097
Accrued liabilities		8,871			12,568
Share-based compensation expense		8,988			9,494
U.S. foreign tax credits		11,199			8,807
U.S. federal social security tax deferral		4,038			—
Inventory adjustments		2,131			1,242
Other		1,101			651
Total deferred tax assets		71,419			59,859
Valuation allowance		(50,543	)		(38,287	)
Total deferred tax assets, net		20,876			21,572
Deferred tax liabilities attributable to:
Depreciation and amortization		107,672			94,920
Net deferred tax liability	$	86,796		$	73,348

We believe that it is more-likely-than-not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets, net of the valuation allowance. We have recorded a valuation allowance to account for uncertainties regarding recoverability of certain deferred tax assets, primarily foreign loss carry-forwards.

Domestic earnings before provision for income taxes were $168.0 million, $328.3 million and $300.4 million in the fiscal years 2020, 2019 and 2018, respectively. Foreign operations had a loss before provision for income taxes of $8.0 million in the fiscal year 2020 and earnings before provision for income taxes of $33.9 million and $28.0 million in the fiscal years 2019 and 2018, respectively.

Tax reserves are evaluated and adjusted as appropriate, while taking into account the progress of audits by various taxing jurisdictions and other changes in relevant facts and circumstances evident at each balance sheet date. We do not expect the outcome of current or future tax audits to have a material adverse effect on our consolidated financial condition, results of operations or cash flow.

As of September 30, 2020, no deferred taxes have been provided on the accumulated undistributed earnings of our foreign operations beyond the amounts recorded for deemed repatriation of such earnings, as required by U.S. Tax Reform. An actual repatriation of earnings from our foreign operations could still be subject to additional foreign withholding taxes and U.S. state taxes. Based upon evaluation of our foreign operations, undistributed earnings are intended to remain permanently reinvested to finance anticipated future growth and expansion, and accordingly, deferred taxes have not been provided. If undistributed earnings of our foreign operations were not considered permanently reinvested as of September 30, 2020, an immaterial amount of additional deferred taxes would have been provided.

At September 30, 2020 and 2019, we had total operating loss carry-forwards of $128.2 million and $97.3 million, respectively, of which $111.7 million and $79.0 million, respectively, are subject to a valuation allowance. At September 30, 2020, operating loss carry-forwards of $6.2 million expire between 2021 and 2032 and operating loss carry-forwards of $122.0 million have no expiration date. At September 30, 2020 and 2019, we had tax credit carry-forwards of $13.8 million and $11.2 million, respectively. This includes a U.S. foreign tax credit carry-forward of $11.2 million primarily as a result of the deemed repatriation tax under U.S. Tax Reform. This credit expires in 2028. We do not believe the realization of the U.S. foreign tax credit is more-likely-than-not, so a valuation allowance has been recorded against its full value. Of the remaining tax credit carry-forwards, at September 30, 2020, $1.2 million expire between 2024 and 2028, and $1.4 million have no expiration date. Total tax credit carry-forwards of $12.6 million and $10.1 million are subject to a valuation allowance at September 30, 2020 and 2019, respectively.

The changes in the amount of unrecognized tax benefits are as follows (in thousands):

	Fiscal Year Ended September 30,
	2020			2019
Balance at beginning of the fiscal year	$	2,000		$	1,368
Increases related to prior year tax positions		—			—
Decreases related to prior year tax positions		(4	)		(4	)
Increases related to current year tax positions		250			954
Lapse of statute		(193	)		(318	)
Balance at end of fiscal year	$	2,053		$	2,000

We recognize interest and penalties, accrued in connection with unrecognized tax benefits, in provision for income taxes. Accrued interest and penalties, in the aggregate, were $0.2 million at September 30, 2020 and 2019.

Because existing tax positions will continue to generate increased liabilities for unrecognized tax benefits over the next 12 months, and the fact that from time to time our tax returns are routinely under audit by various taxing authorities, it is reasonably possible that the amount of unrecognized tax benefits will change during the next 12 months. An estimate of the amount of such change, or a range thereof, cannot reasonably be made at this time. However, we do not expect the change, if any, to have a material effect on our consolidated financial condition or results of operations within the next 12 months.

Our consolidated federal income tax return for the fiscal years ended September 30, 2019 and 2018, are currently under IRS examination. Our statute remains open for the fiscal year ended September 30, 2017, forward. Our U.S. state income tax returns are impacted by various statutes of limitations and are generally open for the fiscal year ended September 30, 2017 and future years. Our foreign income tax returns are impacted by various statutes of limitations, which are generally open from 2015 forward.