8. Income Taxes

Income tax expense differs from the amounts determined by applying the statutory federal income tax rate of 34% to the income before income tax provision for the following reasons (dollars in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014

Income tax at federal rate	$	373		$	1,288		$	914		$	2,633
Increase (decrease) resulting from:
State income taxes, net of federal income tax	46			143			113			310
Compensation deduction limitations	104			236			228			354
Expense reflected in tax basis	211			—			211			—
Other permanent differences	49			185			154			248
Capital goods excise tax credit	(140		)	(303		)	(363		)	(404		)


Total income tax expense	$	643		$	1,549		$	1,257		$	3,141

The Company evaluates its tax positions for liability recognition. As of June 30, 2015, the Company had no unrecognized tax benefits. No interest or penalties related to tax assessments were recognized in the Company’s condensed consolidated statements of operations for the three and six months ended June 30, 2015 or 2014. All tax years from 2011 remain open for both federal and Hawaii state purposes.