Income Taxes

TRS Holdings and Observatory TRS are taxable entities and their consolidated provision for income taxes consisted of the following for the years ended December 31, 2018, 2017 and 2016 (amounts in thousands):



	For the Year Ended December 31,
	2018			2017			2016
Current:
Federal	$	(2,389	)	$	(3,923	)	$	(3,632	)
State and local	(2,253		)	(2,304		)	(2,055		)
Total current	(4,642		)	(6,227		)	(5,687		)
Deferred:
Federal	—			(446		)	(291		)
State and local	—			—			(168		)
Total deferred	—			(446		)	(459		)
Income tax expense	$	(4,642	)	$	(6,673	)	$	(6,146	)

In December 2017, the Tax Cuts and Jobs Act (the “TCJA”) was enacted. The TCJA includes a number of changes to existing U.S. tax laws, most notably a reduction of the U.S. corporate income tax rate from 35 percent to 21 percent, effective January 1, 2018. We measure deferred tax assets using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid. Accordingly, our deferred tax assets were remeasured to reflect the reduction in the U.S. corporate income tax rate, resulting in a $0.4 million increase in income tax expense for the year ended December 31, 2017 and a corresponding decrease of the same amount in our deferred assets as of December 31, 2017.

The effective income tax rate is 34.0%, 48.5% and 44.8% for the years ended December 31, 2018, 2017 and 2016, respectively. The actual tax provision differed from that computed at the federal statutory corporate rate as follows (amounts in thousands):



	For the Year Ended December 31,
	2018			2017			2016
Federal tax expense at statutory rate	$	(2,844	)	$	(4,684	)	$	(4,629	)
State income taxes, net of federal benefit	(1,798		)	(1,543		)	(1,517		)
Corporate income tax rate adjustment	—			(446		)	—
Income tax expense	$	(4,642	)	$	(6,673	)	$	(6,146	)

The income tax effects of temporary differences that give rise to deferred tax assets are presented below as of December 31, 2018, 2017 and 2016 (amounts in thousands):



	2018		2017		2016
Deferred tax assets:
Deferred revenue on unredeemed observatory admission ticket sales	$	1,396	$	1,395	$	198

Deferred tax assets at December 31, 2018, 2017 and 2016, respectively, are attributable to the inclusion of deferred revenue on Observatory admission ticket sales not redeemed at year-end in determining income for tax reporting purposes and are included in prepaid expenses and other assets on the consolidated balance sheets. No valuation allowance has been recorded against the deferred tax asset because the Company believes that the deferred tax asset will, more likely than not, be realized. This determination is based on the Observatory TRS’s anticipated future taxable income and the reversal of the deferred tax asset.

At December 31, 2018, 2017 and 2016, the TRS entities have no amount of unrecognized tax benefits. For tax years 2018, 2017, 2016 and 2015, the United States federal and state tax returns are open for examination.