Income Taxes

The following table presents the components of our consolidated income tax expense for the years ended December 31, 2015, 2014 and 2013:



	Current			Deferred			Total
Year ended December 31, 2015
U.S. Federal	$	3		$	(3,768	)	$	(3,765	)
State and local	(60		)	$	883		$	823
Foreign	423			—			423
	$	366		$	(2,885	)	$	(2,519	)
Year ended December 31, 2014
U.S. Federal	$	247		$	2,571		$	2,818
State and local	599			(702		)	(103		)
Foreign	460						460
	$	1,306		$	1,869		$	3,175
Year ended December 31, 2013
U.S. Federal	$	(936	)	$	19		$	(917	)
State and local	238			(258		)	(20		)
	$	(698	)	$	(239	)	$	(937	)

The Company’s income tax provision reconciles to the provision at the statutory U.S. federal income tax rate for each year ended December 31, as follows:



	2015			2014			2013
Statutory amount (computed at 35%)	$	(3,703	)	$	3,519		$	(212	)
State income tax, net of federal benefit	(709		)	(312		)	(20		)
Permanent differences	43			122			(13		)
Permanent differences, incentive stock options	298			157			237
True up of deferred balances for non-qualified stock options	—			—			(571		)
True up of deferred balances for state tax benefits	—			—			(401		)
True up to prior year taxes	—			(311		)	—
Valuation Allowance	1,552			—			—
Other, net	—			—			43
Consolidated income tax provision	$	(2,519	)	$	3,175		$	(937	)
Consolidated effective tax rate	23.8		%	31.6		%	154.6		%

The Company’s effective tax rate is based on expected income, statutory tax rates and tax planning opportunities available to it. For interim financial reporting, the Company estimates its annual tax rate based on projected taxable income (or loss) for the full year and records a quarterly tax provision in accordance with the anticipated annual rate.

In the current year, the rate differed from the Company’s statutory rate of 35% primarily due to the recognition of a valuation allowance on certain state NOLs, as described below, as well as state income taxes, and the non-deductibility of certain permanent tax items, such as incentive stock compensation expense.

The Company’s deferred tax assets and liabilities are as follows:



	December 31, 2015						December 31, 2014
	Current			Long- term			Current			Long- term
Assets related to:
Accrued liabilities	$	3,073		$	—		$	2,714		$	—
Intangible assets	—			2,983			111			1,935
Net operating loss carryforward	—			4,597			—			3,797
Valuation Allowance	—			(1,552		)	—			—
Non-qualified stock options	31			1,354			45			1,248
Foreign tax credits	—			1,501			—			1,078
AMT credits	—			995			—			993
Other	44			32			44			(16		)
Total assets	3,148			9,910			2,914			9,035
Liabilities related to:
Depreciation and amortization	—			(24,309		)	—			(26,173		)
Goodwill	—			(4,933		)	—			(3,753		)
Deferred revenue on maintenance contracts	(8		)	—			(1,121		)	14
Other	(32		)	(13		)	(38		)	—
Total liabilities	(40		)	(29,255		)	(1,159		)	(29,912		)
Net deferred assets (liabilities)	$	3,108		$	(19,345	)	$	1,755		$	(20,877	)

As reported in the balance sheets:



	December 31, 2015			December 31, 2014
Net current deferred tax assets	3,108			1,755
Net non-current deferred tax liabilities	(19,345		)	(20,877		)
Total net deferred tax liabilities:	$	(16,237	)	$	(19,122	)

The Company assessed the realizability of its deferred tax assets at December 31, 2015, and considered whether it was more likely than not that some portion or all of the deferred tax assets will not be realized. The realization of deferred tax assets depends upon the generation of future taxable income, which includes the reversal of deferred tax liabilities related to depreciation, during the periods in which these temporary differences become deductible.

The Company has a tax effected net operating loss carryforward ("NOL") in 2015 of $3.5 million for state income tax reporting purposes due to the losses sustained in various states. The Company believes it will be able to partially utilize these NOLs against future income primarily with reversing of temporary differences attributable to depreciation, due to expiration dates well into the future. However, the Company has determined that a portion of the NOLs, specifically related to Florida, will more likely than not be able to be fully utilized. Therefore, a valuation allowance of $1.6 million was established for this portion of the NOL. For federal tax purposes, the Company has utilized its ability to carry losses back prior to 2015. Approximately $1.1 million remains as a federal tax carryforward, which the Company believes it will be able to utilize before expiration.

As of December 31, 2015 the Company had approximately $1 million of alternative minimum tax credits available that do not expire. In addition, excess tax benefits of approximately $2.1 million associated with the vesting of restricted stock awards and other stock options are not included in the federal net operating loss carryovers, but will not be recognized as a tax benefit recorded to additional paid-in capital until realized.

The Company and its subsidiaries file consolidated federal income tax returns in the United States and also file in various states. With few exceptions, the Company remains subject to federal and state income tax examinations for the years of 2012, 2013, and 2014. The Company’s policy is to recognize interest and penalties related to any unrecognized tax liabilities as additional tax expense. No interest or penalties have been accrued at December 31, 2015 and 2014, as the Company has not recorded any uncertain tax positions. The Company believes it has appropriate and adequate support for the income tax positions taken and to be taken on its tax returns and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter.

Although the Company believes its recorded assets and liabilities are reasonable, tax regulations are subject to interpretation and tax litigation is inherently uncertain; therefore the Company’s assessments can involve both a series of complex judgments about future events and rely heavily on estimates and assumptions. Although the Company believes that the estimates and assumptions supporting its assessments are reasonable, the final determination of tax audit settlements and any related litigation could be materially different from that which is reflected in historical income tax provisions and recorded assets and liabilities. If the Company were to settle an audit or a matter under litigation, it could have a material effect on the income tax provision, net income, or cash flows in the period or periods for which that determination is made. Any accruals for tax contingencies are provided for in accordance with U.S. GAAP.

The Company does not believe that its tax positions will significantly change due to any settlement and/or expiration of statutes of limitations prior to December 31, 2016.