12. Income Taxes

Income tax expense (benefit) consisted of the following:



	Fiscal year ended
	May 31		June 1		June 2
	2014		2013		2012
Current:
Federal	$	38,940	$	28,144	$	37,770
State		5,470		2,410		6,010
		44,410		30,554		43,780
Deferred:
Federal		6,474		(4,937)		4,300
State		1,151		(810)		1,030
		7,625		(5,747)		5,330
	$	52,035	$	24,807	$	49,110

Significant components of the Company’s deferred tax liabilities and assets were as follows:



	May 31		June 1
	2014		2013
Deferred tax liabilities:
Property, plant and equipment	$	41,393	$	35,108
Cash basis temporary differences		637		817
Inventories		34,163		32,720
Investment in affiliates		487		4,248
Other comprehensive income		294		95
Other		3,800		3,540
Total deferred tax liabilities		80,774		76,528

Deferred tax assets:
Accrued expenses		3,122		13,957
Other		6,699		4,157
Total deferred tax assets		9,821		18,114
Net deferred tax liabilities	$	70,953	$	58,414

Effective May 29, 1988, the Company could no longer use cash basis accounting for its farming subsidiary because of tax law changes. The Taxpayer Relief Act of 1997 provides that taxes on the cash basis temporary differences as of that date are generally payable over 20 years beginning in fiscal 1999 or in full in the first fiscal year in which there is a change in ownership control. The Company uses the farm-price method for valuing inventories for income tax purposes.

The differences between income tax expense (benefit) at the Company’s effective income tax rate and income tax expense (benefit) at the statutory federal income tax rate were as follows:



	Fiscal year end
	May 31		June 1		June 2
	2014		2013		2012

Statutory federal income tax	$	56,435	$	26,331	$	48,595
State income taxes, net		4,303		1,040		4,576
Domestic manufacturers deduction		(3,810)		(2,860)		(3,596)
Reversal of outside basis in equity investment-Delta Egg		(3,295)		-		-
Non-taxable remeasurement gain upon consolidation of Delta Egg		(1,392)		-		-
Tax exempt interest income		(143)		(76)		(267)
Other, net		(63)		372		(198)
	$	52,035	$	24,807	$	49,110

Federal and state income taxes of $41.6 million, $42.7 million, and $27.1 million were paid in fiscal years 2014, 2013, and 2012, respectively. Federal and state income taxes of zero, $12,000, and $510,000 were refunded in fiscal years 2014, 2013, and 2012, respectively.

We had no significant unrecognized tax benefits at June 1, 2013 or at June 2, 2012. Accordingly, we do not have any interest or penalties related to uncertain tax positions. However, if interest or penalties were to be incurred related to uncertain tax positions, such amounts would be recognized in income tax expense. Tax periods for all years after fiscal year 2010 remain open to examination by the federal and state taxing jurisdictions to which we are subject.